GOME founder's breakup threat
By Richard Fu |
October 30, 2010, Saturday
|
Print Edition
Print Edition
JAILED Chinese tycoon Huang Guangyu is threatening to split electronics retail giant GOME by developing its unlisted part separately, in the latest twist in a long-running battle between the company founder and its incumbent management.
Huang, still the largest shareholder of Hong Kong-listed GOME Electrical Appliances Holdings Ltd, also insisted that Chairman Chen Xiao should quit the board, according to a statement issued by Huang's spokesman.
Last month at a special general meeting, Huang failed to convince investors to oust Chen.
While in prison, Huang cannot take a direct role in the company, but can exert influence through his representatives.
Huang's representatives have been in talks with GOME about continuing the company's procurement and management of 400 GOME-branded stores privately owned by Huang.
But negotiations have failed, and there have been serious problems in the company's development over the past year, for which Chen should be held accountable, the statement claimed.
Huang's representatives will call for an extraordinary general meeting if no solution can be found "in a reasonable time" and will consider terminating procurement and management agreements between the listed group - some 740 stores - and Huang's 400 unlisted shops.
Shares of the home appliance company plunged 6.12 percent yesterday.
Huang plans to increase the number of unlisted GOME-branded stores from 400 to 750 in 200 towns and cities in the next five years, with annual sales of 45 billion yuan (US$6.7 billion). His side claims to have the capital to take the unlisted assets and is in talks with "internationally renowned" private equity funds for future investment.
In last month's meeting, Huang failed to install his sister and lawyer as directors. However, he won approval for his proposal to cancel management moves to issue new shares, which would have diluted Huang's stake in GOME. Huang and his wife Du Juan hold around 32.5 percent of shares in the listed part of GOME.
Huang is serving a 14-year sentence for bribery, insider trading and illegally buying foreign currency.
Huang, still the largest shareholder of Hong Kong-listed GOME Electrical Appliances Holdings Ltd, also insisted that Chairman Chen Xiao should quit the board, according to a statement issued by Huang's spokesman.
Last month at a special general meeting, Huang failed to convince investors to oust Chen.
While in prison, Huang cannot take a direct role in the company, but can exert influence through his representatives.
Huang's representatives have been in talks with GOME about continuing the company's procurement and management of 400 GOME-branded stores privately owned by Huang.
But negotiations have failed, and there have been serious problems in the company's development over the past year, for which Chen should be held accountable, the statement claimed.
Huang's representatives will call for an extraordinary general meeting if no solution can be found "in a reasonable time" and will consider terminating procurement and management agreements between the listed group - some 740 stores - and Huang's 400 unlisted shops.
Shares of the home appliance company plunged 6.12 percent yesterday.
Huang plans to increase the number of unlisted GOME-branded stores from 400 to 750 in 200 towns and cities in the next five years, with annual sales of 45 billion yuan (US$6.7 billion). His side claims to have the capital to take the unlisted assets and is in talks with "internationally renowned" private equity funds for future investment.
In last month's meeting, Huang failed to install his sister and lawyer as directors. However, he won approval for his proposal to cancel management moves to issue new shares, which would have diluted Huang's stake in GOME. Huang and his wife Du Juan hold around 32.5 percent of shares in the listed part of GOME.
Huang is serving a 14-year sentence for bribery, insider trading and illegally buying foreign currency.
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