Speculative buying spree buoys Brilliance China
Brilliance China Automotive shares staged a rebound yesterday despite the intensifying row between the company and its former chairman, Yang Rong.
Analysts said the 2.06 per cent rise to 99 HK cents was supported by speculative buying, taking into account the 30.7 per cent drop in the stock this year.
On Tuesday night, Brilliance China confirmed that Liaoning police suspected Mr Yang, who fled to America in May, of being involved in economic crimes.
The following day, Mr Yang hit back, accusing the Liaoning provincial government of trying to assert ownership over what he claimed were his private assets through the issue of a 'groundless' arrest warrant.
Despite the rebound, South China Research analyst Patrick Pang said he would not recommend buying the company's stock until the row was resolved.
Tai Fook Securities analyst Hu Wen-hei, meanwhile, raised concerns over a potential joint venture between Brilliance China and BMW amid the intensifying battle.
But she believed that the operation of Brilliance China would not be significantly affected by the row.
BMW was unavailable for comment.
Mr Yang, dismissed as chairman of Brilliance China in June, also questioned on Wednesday the corporate disclosure of the new management of the mini-van maker.
According to a 'confidential' document disclosed by Mr Yang, the Liaoning government early this year set up an ad hoc working committee to try to find fault with, and question the legitimacy of, his ownership.
'Brilliance China should know about the working group as its existing chairman Wu Xiaoan is one of the group members,' Mr Yang said.
A Liaoning official yesterday said he was not aware of the formation of such a group.
'Our office must be informed if a new working committee or ad hoc group has been established,' said Qi Ming, deputy chief of the eighth division of Liaoning Administration Office.
Mr Yang said he had sent a copy of the document to the Hong Kong Stock Exchange on Monday, and accused Brilliance China management of keeping minority shareholders in the dark.
An exchange spokesman on Wednesday declined to confirm if it had received the document.
A spokesman at Brilliance China yesterday reiterated that the management was not aware of any document that confirmed the formation of such a group.
Analysts said Mr Yang's chances of winning the battle depended on the political and economic environment in China - and on how badly Beijing's leaders wanted to support the development of the private sector.