According to informed sources, Blackstone Group LP's proposed $4 billion investment plan in Hong Kong real estate developer New World Development appears to have encountered obstacles. Negotiations have reached a stalemate over a perennial issue surrounding family-controlled businesses: who holds control.

The private equity giant had proposed a structural arrangement: it would invest approximately $2.5 billion into a special purpose vehicle, which could potentially make it the largest shareholder of New World. As part of the plan, the Cheng family, which operates the company, was expected to contribute an additional $1 to $1.5 billion, providing financial support for the developer, which is struggling under growing balance sheet pressure.

However, the sticking point appears to be governance rights. The Cheng family, which effectively controls New World through Chow Tai Fook Enterprises and holds approximately 45% of the shares, is reportedly unwilling to relinquish significant influence over the company.