Shares in China's biggest van maker, Brilliance China, have been suspended on the Hong Kong Stock Exchange amid reports of a plans for a partial takeover by the Chinese government.

...a big change will be unlikely as China wants to see the project (with BMW) proceed smoothly

Salomon Smith Barney analyst

Brilliance China has a joint venture with German car maker BMW to build luxury sedans and a tie up with MG Rover to make components and small cars on which jobs at the UK firm's Longbridge plant depend.

The HKSE said trading in the shares had been suspended pending the release of information which could affect the share price, but gave no details.

However, local press reports have suggested that the mainland authorities may be about to take control of the company's largest shareholding, and end a dispute with company founder and ex-chairman, Yang Rong, who was dismissed in June.

Fugitive tycoon

Brilliance China officials could not be reached for comment.

Mr Yang is thought to have fled China earlier for this year US.

He has since told a Hong Kong magazine he feared for his safety in China because he was being accused of "economic crimes".

The authorities in China Brilliance's home province of Liaoning said in October they were seeking Mr Yang's arrest.

Mr Yang has always denied any wrongdoing. He says he is caught in a dispute over compensation for his former role in Brilliance China.

Brilliance China's biggest shareholder - with 39.45% - is an educational foundation set up by Mr Yang as part of a deal with China's central bank to prepare the car maker for its stock market listing.

Brilliance China became the first Chinese firm to list on the New York stock market, 10 years ago.

Shareholders hope for solution

Analysts said investors might welcome any move by the Chinese authorities take control of the vehicle maker and resolve the confusion.

The joint venture with BMW was unlikely to be jeopardised, they added.

"Given the existing management has been in co-operation talks with BMW for a long time, a big change will be unlikely as China wants to see the project proceed smoothly," said Charles Cheung, an analyst at Salomon Smith Barney in Hong Kong.

Shares in Brilliance China have risen 10% in the last month on rumours of a state takeover.

Foreign car firms are piling into China's booming car market to take advantage of growing demand.

Mr Yang was ranked by Forbes as China's third-richest businessman in 2001 with wealth estimated at $840m.

China does not have an extradition treaty with the US.