NVC Lighting shareholders vote 95pc to oust founder
NVC Lighting's shareholders voted overwhelmingly to remove Wu Changjiang from all positions on the board yesterday, but the firm said it continues to lose millions of yuan while its founder refuses to accept his ouster.
The Hong Kong-listed firm said its factory in Wanzhou, Chongqing, will lose 21 million yuan (HK$26.4 million) for every month Wu fails to relinquish his grip on it. So far, his refusal to yield the plant has generated 14 million yuan of losses, said NVC, one of China's biggest lighting manufacturers.
This threatens to send the firm into the red. Its net profit fell 28.5 per cent to 58 million yuan last year, while revenue grew just 0.9 per cent to 1.7 billion yuan.
At an extraordinary general meeting yesterday, a motion to remove Wu from all positions on the board received 95.84 per cent of shareholders' votes, with 4.16 per cent opposed.
NVC's lawyers in Hong Kong and on the mainland have started legal proceedings against Wu, said Wang Donglei, NVC's non-executive chairman and interim chief executive, but he gave no details.
The board is "extremely irresponsible. I will defend my rights according to the law", Wu said on Thursday in an email to the South China Morning Post.
"My removal will only hurt the interests of NVC shareholders even more," he said on his Weibo microblog on the same day.
On August 8, NVC's board voted to dismiss Wu as chief executive, but Wu voted against his ouster and refused to accept the board's decision. Wang said if NVC failed to recover the Wanzhou factory, it might have to boost production at its other factories to compensate for the lost production.
"We believe China upholds the rule of law," Wang said. "We are hopeful, with the support of the local government, we will recover the Wanzhou factory."
In December 2012, Wu sold 11.81 per cent of NVC to Elec-Tech International, a Shenzhen-listed lighting manufacturer founded and owned by Wang.
Wang joined NVC in January last year as a non-executive director and was appointed chairman three months later. On his Weibo, Wu alleged Wang resorted to deceitful means to obtain the NVC shares through a "gentleman's agreement" the two men signed in 2012. Wu published the agreement on the microblog, although the agreement said its content was to be secret.
Wang confirmed he had signed such an agreement with Wu, saying that at the time he bought Wu's NVC shares, the shares were pledged to banks.
"I bought the shares from the banks, or the banks would have taken over the shares. Wu was on the verge of bankruptcy. I was his saviour," Wang said. "I personally lent some money to him."