GOME to take legal action over its founder
By Pan Xiaoyi |
August 6, 2010, Friday
|
Print Edition
Print Edition
GOME Electrical Appliances Holding is to take legal proceedings against Huang Guangyu, founder and former chairman of the company, seeking compensation in connection with his breach of fiduciary duties.
The company filed a writ of summons against Huang in the Hong Kong High Court yesterday to claim for damages suffered by the company for his breaches relating to the repurchases of the company's shares in early 2008, the company said in a statement to Hong Kong Stock Exchange.
Meanwhile, GOME received letters from Shining Crown Holdings, Huang's wholly owned company, proposing a number of changes in the management team including depriving Chen Xiao of his duties as executive director and board chairman as well as cancellation of the company's general mandate passed earlier, the company said.
Insider trading
The moves reflect deepening disagreement between the current management team and the former chairman, who is not willing to give up his control over the company despite being jailed for 14 years this year for bribery and insider trading.
Huang remains the single biggest shareholder with 34 percent of GOME's shares and he has appealed his sentence.
The conflict first emerged in May when Huang vetoed five decisions discussed at a board meeting including assigning three personnel from Bain Capital, also a major shareholder, as non-executive directors.
However, the board of directors unanimously approved the assignment regardless of Huang's opposition.
There are also media reports that Huang demanded GOME take action to share responsibility in the accusation against him to alleviate his own punishment after he was detained in late 2008, a demand which was rejected by the company.
Adverse effect
"The arrest and later conviction of Huang for various economic crimes caused a great deal of uncertainty for the company, and inevitably continued to have a significant adverse effect to some extent, especially on its ability to access capital," the company said.
The board is unanimous in its belief that the proposals put forward by Shining Crown are unwarranted and driven by the interests of just one shareholder, the company said.
And it is strongly opposed to the proposals from Shining Crown, which it considers to be "completely unmerited, significantly restrict management's flexibility to access capital and put the company at a distinct disadvantage in a highly competitive market environment."
Shares were suspended from trading yesterday and will resume trading today, the company said.
The company filed a writ of summons against Huang in the Hong Kong High Court yesterday to claim for damages suffered by the company for his breaches relating to the repurchases of the company's shares in early 2008, the company said in a statement to Hong Kong Stock Exchange.
Meanwhile, GOME received letters from Shining Crown Holdings, Huang's wholly owned company, proposing a number of changes in the management team including depriving Chen Xiao of his duties as executive director and board chairman as well as cancellation of the company's general mandate passed earlier, the company said.
Insider trading
The moves reflect deepening disagreement between the current management team and the former chairman, who is not willing to give up his control over the company despite being jailed for 14 years this year for bribery and insider trading.
Huang remains the single biggest shareholder with 34 percent of GOME's shares and he has appealed his sentence.
The conflict first emerged in May when Huang vetoed five decisions discussed at a board meeting including assigning three personnel from Bain Capital, also a major shareholder, as non-executive directors.
However, the board of directors unanimously approved the assignment regardless of Huang's opposition.
There are also media reports that Huang demanded GOME take action to share responsibility in the accusation against him to alleviate his own punishment after he was detained in late 2008, a demand which was rejected by the company.
Adverse effect
"The arrest and later conviction of Huang for various economic crimes caused a great deal of uncertainty for the company, and inevitably continued to have a significant adverse effect to some extent, especially on its ability to access capital," the company said.
The board is unanimous in its belief that the proposals put forward by Shining Crown are unwarranted and driven by the interests of just one shareholder, the company said.
And it is strongly opposed to the proposals from Shining Crown, which it considers to be "completely unmerited, significantly restrict management's flexibility to access capital and put the company at a distinct disadvantage in a highly competitive market environment."
Shares were suspended from trading yesterday and will resume trading today, the company said.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
