Yingde’s Sun and Strutt regain control after thwarting boardroom coup

Share holders last Wednesday voted in favour of kicking Zhao Xiangti off he board, after he joined other directors in staging a coup against Sun and Strutt

PUBLISHED : Monday, 13 March, 2017, 3:51pm
UPDATED : Monday, 13 March, 2017, 3:51pm

After defeating an attempted four-month boardroom coup, Mark Sun Zhongguo has returned to the helm of Yingde Gases Group, China’s third largest supplier of industrial gases, which has also added an independent director to aid the company’s planned sale.

Sun was re-appointed on Sunday as chairman and chief executive, while chief operating officer Trevor Strutt resumed that position, Yingde said in a filing to Hong Kong’s stock exchange on Monday.

Both were stripped of their executive roles in an early November board meeting without their presence.

Shareholders last Wednesday voted in favour of kicking Zhao Xiangti off he board, after he joined other directors in staging a coup against Sun and Strutt.

Zhao, Sun and Strutt are the company’s founding shareholders, who together own 41.9 per cent of Yingde.

“The board is pleased to confirm it is committed to the sale process of the company, with Morgan Stanley,” Yingde said.

The investment bank was appointed by the board just over a month ago as financial advisor to assist it to evaluate possible takeover offers.

Yingde edged rose 1.6 per cent on Monday to HK$6.3 by 3pm.

The board is pleased to confirm it is committed to the sale process of the company, with Morgan Stanley
Yingde statement

The new Yingde board has also appointed Rawen Huang as an additional independent non-executive director, following last Wednesday’s appointment of Mah Zhihe to the same role.

The board now consists of four independent non-executive directors and two executive directors – Sun and Strutt.

Shareholders last week voted against Sun and Strutt’s proposal to limit the number of board directors to five.

Huang is the founder and portfolio manager of Petrel Capital Management, and formerly an investment analyst at Oasis Management and Morgan Stanley.

Petrel owns 0.03 per cent of Yingde.

Oasis, a US-based private investor which owns 4.5 per cent of Yingde, late last month sought representation on Yingde’s board to ensure the company’s sale process was run “with genuine intent to maximise value for all shareholders”.

Oasis founder and chief investment officer Seth Fischer told the South China Morning Post he is confident Huang will be able to “drive value for shareholders” in the sale process.

So far, the only binding offer on the table is from Hong Kong-based private equity PAG Asia Capital at HK$6 per share. Zhao, Sun and Strutt have signed irrevocable undertakings to accept the offer.

Yingde’s US-based rival Air Products late December indicated an interest in offering HK$5.5 to HK$6, but has yet to make a formal offer. It has been conducting due diligence since February 22.

The board on Monday also announced the resignation of Samantha Wong Sze-wing from the roles of joint company secretary and authorised representative, but remain as chief financial officer.

Strutt has taken up the authorised representative role, while Mok Ming-wai will be the sole company secretary.

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