Chaoda Agriculture boss loses supply contract
Asian Citrus Holdings, the mainland orange grower that counts embattled farming company Chaoda Modern Agriculture as a major investor, has cancelled a key supply contract with Chaoda's chairman, Kwok Ho.
Hong Kong and London-listed Asian Citrus announced yesterday it would stop buying its fertilisers from Kwok, who is under government investigation for insider dealing.
On September 28, Financial Secretary John Tsang Chun-wah said Kwok, along with Chaoda's finance director Andy Chan Chi-po, gave confidential information about an upcoming share placement by the farming company to a fund manager who then traded on the news.
George Stairs of US-based Fidelity Management & Research was also charged with insider dealing.
Asian Citrus's shares have fallen 18 per cent since September 28.
Chaoda has denied that Kwok and Chan did anything wrong. The farming company was also accused in May by Hong Kong's Next Magazine of exaggerating the size of its land bank, allegations Chaoda refuted.
Asian Citrus said it 'decided not to renew the fertiliser supply agreement with Fujian Chaoda Group', a private company that is 95 per cent owned by Kwok, when it expires next June.
The orange grower, which is 13 per cent owned by Chaoda, said: 'Sufficient organic fertilisers can readily be sourced from other independent suppliers at competitive prices.'
The fertiliser contract is Asian Citrus' only business relationship with its controversial shareholder.