NVC Lighting hit by strike threat
Suppliers and distributors have reportedly cut deals with the Hong Kong-listed lighting manufacturer to support former chairman
Suppliers have reportedly stopped dealing with Hong Kong-listed NVC Lighting amid growing tensions between the board and management.
The company's management told an analyst, who declined to be named, that although some suppliers have stopped supplying NVC, the lighting manufacturer can source components from other suppliers.
About 20 companies, the majority of NVC's suppliers, have suspended supplies to the mainland firm, while tension between NVC's management and board of directors rises, reported Sina.com a news portal.
On July 12, some of NVC's suppliers and distributors, as well as most of its senior management, met members of NVC's board, the company announced on July 18. At that meeting, the suppliers, distributors and management demanded that former NVC chairman Wu Changjiang be re-elected as chairman and executive director of the firm, some members of the management and distributors be appointed to the board while other members of NVC's senior management resign.
"The members indicated that if the board failed to satisfy their demands, [they] would take further action. Since these meetings, members have started taking action which adversely affected the company. These included strikes at two of its plants and its Chongqing office and the suspension of further orders by distributors," said the company.
On May 24, Wu resigned as chairman, CEO and executive director of NVC for "personal reasons", the company announced on May 25.
According to the Hong Kong Stock Exchange website, when he resigned on May 24, Wu ceased to hold 15.67 per cent, or 494.85 million shares of NVC, which was worth HK$1.09 billion based on the company's share price of HK$2.20 that day. However, the exchange's website indicated Wu held 18.45 per cent of NVC on May 25.
"We suspend coverage on NVC today [May 28] as we are uncomfortable about the former chairman Mr Wu's sudden departure," said a report by Kim Eng Securities on May 28. NVC's shares have been suspended since July 13 pending the release of price-sensitive information.