Yangzijiang/ SIIC: Chairman of Yangzijiang Shipbuilding, Ren Yuanlin, has been reported to the stock authorities in China over several illegal activities conducted, including insider trading, misrepresentation, infringement of the independent operation of a listed company, illegal access to shares of listed company, manipulation of stock price and interference in the truthful disclosure of regular report. The report was filed by Tianjin Guoheng Railway Holding (China-listed), which is currently suspended due to the investigation.
Ren's investment vehicle, Newyard Worldwide Holdings, also has stakes in Ione Holdings (982 HK) and SIIC Environment. Do note that these counters may be subjected to short-selling pressure in the near term on the negative news.
So far, the reply from YZJ indicates no issue for the company. will the stock price fall some more? At $1.01 closing on Friday, it's not attractive enough for me to venture forth. Just my 2 rmb worth
The Company has since sought clarification from Mr Ren on the matter and understands as follows:
(a) Liyuan Investment acquired a 12.08% stake in Tianjin Guoheng in January 2014 and became its largest shareholder.
(b) Liyuan Investment, as Tianjin Guoheng's largest shareholder, made an approach in early May 2014 to the incumbent board of directors of Tianjin Guoheng to convene a general meeting of shareholders to reconstitute its board (including the appointment of nominees of Liyuan Investment).
(c) The incumbent board of directors however unreasonably resisted Liyuan Investment’s legitimate approach, and shortly thereafter, on 26 May 2014 alleged misdeeds against Liyuan Investment and Mr Ren.
(d) Liyuan Investment has on 28 May 2014, within 2 days of these allegations being made, confidentially submitted its responses and rebuttals to these allegations to the Shenzhen Stock Exchange.
Mr Ren has in addition personally assured the Company and its board of directors that these allegations and its publicity are mischievous, and calculated to damage him and thwart Liyuan Investment’s corporate objectives in relation to Tianjin Guoheng. He will not be deterred from pursuing Liyuan Investment’s lawful interest as the largest shareholder of Tianjin Guoheng and takes a very serious view of such allegations and conduct, and will explore all remedies available to him against the
perpetrators in consultation with his professional advisers.
The Company wishes to emphasise to shareholders that no allegations have been made against the Company or its subsidiaries (“Group”), and the businesses of the Group continue to be operated in its ordinary course.