Singapore: One of China’s largest private shipyards has been forced by the Singapore Exchange to provide reasons why its share price took such a battering on Friday in the Lion Republic.
Yangzijiang Shipbuilding’s share price tanked more than 10% on Friday as investors reacted nervously to a report first carried by SinoShip News that the yard’s chairman is facing a possible investigation into illegal financial practices.
Any share price fall of that magnitude always prompts the Singapore Exchange to ask questions.
Yangzijiang said in a release that “allegations of misdeeds have been made by Tianjin Guoheng Railway Holding” against Ren Yuanlin, the yard’s executive chairman and controlling shareholder and Taixing City Liyuan Investment Co, (Liyuan Investment), his investment vehicle.
Liyuan Investment acquired a 12.08% stake in Tianjin Guoheng in January 2014 and became its largest shareholder.
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.
“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,” Yangzijiang said in a release.
Ren has said the allegations 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,” Yangzijiang concluded.
Tianjin Guoheng accused Ren Yuanlin of several illegal activities including insider trading, misrepresentation, infringement of the independent operation of a listed company, illegal access to shares of a listed company and manipulation of stock prices.
Currently authorities have suspended the stock trading of Tianjin Guoheng, and are investigating the case. [02/06/14]