Artini plans revamp after co-founders' divorce deal

PUBLISHED : Wednesday, 12 December, 2012, 12:00am
UPDATED : Wednesday, 12 December, 2012, 2:58am

Artini China, a loss-making Hong Kong-based manufacturer of women's accessories, pledged to overhaul itself yesterday after the company's co-founders reached a divorce settlement.

Shares of Artini soared 10.3 per cent to HK$0.375 per share yesterday after the company announced on Monday a transfer of shares from the chairman to his ex-wife and his younger brother, who replaces him as chairman.

The firm caught investors' attention in July when it said in a statement it was unable to contact its then chairman and chief executive, Tse Chiu-kwan, and the board appointed his wife, Yip Ying-kam, as the firm's acting chief executive.

Unlike the case with most governance scandals, the firm's share price has doubled over the past year, while the Hang Seng Index rose about 26 per cent over the same period. But the share price does fluctuate significantly.

"We are confident that the company will turn a profit next year, supported by cost-saving measures and an increased number of vendors in China," said Yip, the company's vice-chairman and now the ex-wife of Tse, after she filed for divorce, saying her husband was suffering from a mental illness.

Yip, who returned from retirement to the company in February, denied speculation about her husband having extramarital affairs.

After the share transfer from the former chairman, the younger Tse holds 26.6 per cent of the company's shares, and Yip holds 15 per cent.

Despite the robust share price performance, the newly appointed chairman said the company had no plans for a share placement or rights issue in the short term.

He said Artini wanted to focus on internal controls and rebuilding its sales and distribution channels.

The company declined to disclose its capital expenditure plans for next year.