aren't there enough groups already? is it really necessary for another Chinese sister group to replace SNH? I'm actually kind of surprised that the current Chinese 48 groups are still allowed to use the XXX48 format for their name. There have even been new groups in China (SHY48, CKG48) since the contract was cut.
I think the creator of AKB wants to have a market for every country and city. With SNH creating their own, and them cutting ties, that means AKB no longer has a Shanghai sister group. It's basically a copyright issue. Although SNH was part of AKB and was an official group, they basically betrayed AKB and took the name along with them. In simple terms, a sister betrayed and backstabbed her other sister and stole from the other. Unfortunately, AKB can't sue SNH because they would have to go to court in China and the Chinese court would of course side by SNH; this is basically the reason why they are still allowed to use the 48 name.