Money Matters | Letter suggests CMR director Yan Qiping is anything but independent
Communications from Yan Qiping to the beleaguered mainland scrap dealer imply that despite title, he’s been company man all along
Here's a joke for you. Genuine independent directors in mainland privately owned enterprises. That's it, that is the punch line.
Take Yan Qiping of China Metal Recycling (Holdings). CMR is not just another company. The scrap dealer was once the darling of fund managers, with profits that grew more than 10 times within five years.
But in June 2013, it was brought down to earth when the Securities and Futures Commission accused it of cooking its books and its chairman and controlling shareholder, Chun Chi-wai, of engaging in "large-scale fraud".
The regulator is seeking to wind up the company to protect shareholders' and creditors' interests, and a provisional liquidator has been appointed.
In cases like these, the role of independent directors becomes crucial. Yet the company's two Hong Kong-based independent directors have already resigned. Yan, a 67-year-old former party secretary of an industry association, is the only one who remains, leading CMR's defence.
He has criticised the commission's moves in mainland press and refuses to co-operate with the provisional liquidator. His "independence", however, has been challenged by High Court Judge Jonathan Harris in a judgment against CMR's application to remove the liquidator.