SINGAPORE (Aug 14): Yangzijiang Shipbuilding (YZJ) has confirmed that executive chairman Ren Yuanlin is “currently assisting in a confidential investigation” carried out by certain Chinese governmental authorities.
This comes days after shares in Yangzijiang had plunged amid rumours swirling about certain publications that Ren was caught up in investigations by Chinese authorities for alleged corruption.
Posts in certain stock investing forums had also alleged that Ren, a controlling shareholder of the company, had been “missing for over two months”.
In response to a query from Singapore Exchange (SGX), Yangzijiang on Wednesday says Ren had “continued to have a decision-making role in respect of major matters of the company” up until Aug 8.
The company adds that Ren has been granted a leave of absence by the board since Aug 9 to focus on the investigation.
“The intention of the leave of absence is to expedite the completion of the Investigation so that he may resume his full-time duties with the group as soon as possible,” Yangzijiang says in a statement.
In his absence, group CEO Ren Letian will assume Ren Yuanlin’s role as a director of the company.
Besides Ren Yuanlin, Yangzijiang says none of its other directors and executive officers are involved in the investigation.
It adds that the businesses and operations of the group are unaffected by the investigation and the executive chairman’s leave of absence.
“The company reserves the right to commence any proceedings and take any actions for any and all causes of action arising from any falsehoods spread in order to protect the reputation of the group and its directors,” it warns.
Yangzijiang before noon on Aug 8 had called for the trading of its shares to be halted, minutes after SGX posted a query about the company's unusual trading activity.
By then, shares in Yangzijiang had tumbled 20% to $1.04, with nearly 84 million units changing hands – more than four times higher compared to its 30-day average volume of some 19 million units.
See: Yangzijiang asks for trading halt after shares fall 20% on heavy volume
In a separate announcement after market close on Wednesday, Yangzijiang requested for the lifting of the trading halt.
“The board is of the opinion that sufficient information has been disclosed to enable trading in the company’s securities to continue in an orderly manner,” it says.
For the 2Q19 ended June, Yangzijiang saw its earnings slip 6% to RMB 936.4 million ($185.7 million), as revenue fell 12% to RMB 7.03 billion.
See: Yangzijiang posts 6% decline in 2Q earnings to $186 mil on lower revenue
