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GOME surges as truce called
By Pan Xiaoyi |
November 12, 2010, Friday
|
Print Edition
Print Edition
Gome Electrical Appliances Holdings Ltd surged to record high in more than a year after the half-year-long internal tussle over control of the retail giant finally ended as jailed founder Huang Guangyu and the management team reconciled.
Under a memorandum of understanding GOME signed with Shining Crown, its largest shareholder, on Wednesday, Zou Xiaochun and Huang Yanhong will serve as executive director and non-executive director respectively for three years, GOME said in a statement to the Hong Kong stock exchange.
The board will expand to 13 directors from 11. The agreement is pending shareholders' approval at a special general meeting to be called.
"Pursuant to the terms of the memorandum of understanding, both parties have committed to cooperate in all respects to implement actions and initiatives to build a stronger and more profitable company," Gome said in its statement.
Separately, Huang issued a statement saying he has no intention to terminate the agreements between the listed and unlisted parts of GOME over management and sourcing.
Shares of GOME jumped as much as 24 percent in Hong Kong before narrowing the gains to 19 percent to close at HK$3.24 (42 US cents). The benchmark Hang Seng Index rose 0.82 percent.
Huang and GOME's board of directors have been openly at odds since May when Huang opposed the appointment of three non-executive directors from Bain Capital. But the GOME board of directors overturned his decision.
At the end of October, Huang threatened to take back the management of 400 unlisted GOME stores after shareholders rejected his proposal to appoint his sister Huang Yanhong and his corporate lawyer Zou as executive directors.
Huang, who is serving a 14-year sentence for illegal business dealings, insider trading and corporate bribery, remains the retailer's largest shareholder with 30.6 percent of the shares.
But Huang's statement didn't say if current chairman Chen Xiao will stay. Huang launched several unsuccessful attempts to unseat Chen.
Under a memorandum of understanding GOME signed with Shining Crown, its largest shareholder, on Wednesday, Zou Xiaochun and Huang Yanhong will serve as executive director and non-executive director respectively for three years, GOME said in a statement to the Hong Kong stock exchange.
The board will expand to 13 directors from 11. The agreement is pending shareholders' approval at a special general meeting to be called.
"Pursuant to the terms of the memorandum of understanding, both parties have committed to cooperate in all respects to implement actions and initiatives to build a stronger and more profitable company," Gome said in its statement.
Separately, Huang issued a statement saying he has no intention to terminate the agreements between the listed and unlisted parts of GOME over management and sourcing.
Shares of GOME jumped as much as 24 percent in Hong Kong before narrowing the gains to 19 percent to close at HK$3.24 (42 US cents). The benchmark Hang Seng Index rose 0.82 percent.
Huang and GOME's board of directors have been openly at odds since May when Huang opposed the appointment of three non-executive directors from Bain Capital. But the GOME board of directors overturned his decision.
At the end of October, Huang threatened to take back the management of 400 unlisted GOME stores after shareholders rejected his proposal to appoint his sister Huang Yanhong and his corporate lawyer Zou as executive directors.
Huang, who is serving a 14-year sentence for illegal business dealings, insider trading and corporate bribery, remains the retailer's largest shareholder with 30.6 percent of the shares.
But Huang's statement didn't say if current chairman Chen Xiao will stay. Huang launched several unsuccessful attempts to unseat Chen.
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