Infighting at China Gas Holdings reached new levels yesterday after shareholders dumped a former chairman and vice-chairman from the board in a marathon and sometimes emotional meeting.
Founding shareholder, Hai Xia Finance Holdings from the Taiwan Affairs Office of the State Council, attacked the decision and singled out substantial shareholder, SK Gas of South Korea, for criticism. It said it 'deeply regretted' the South Korean firm's role in 'actively' supporting and participating in the dismissals of Hai Xia's two representatives as China Gas directors.
Hai Xia 'condemned the disgraceful behaviour of some China Gas board members' for calling the meeting to dismiss former chairman Li Xiaoyun and former vice-chairman Xu Ying. Both motions were approved by two-thirds of shareholders in a closed-door meeting, which lasted three and a half hours yesterday.
Shareholders also removed former China Gas managing director Liu Minghui, who was arrested and detained by Shenzhen police in December for allegedly embezzling corporate assets.
No charges have yet been laid against Liu and former executive president Huang Yong, who was also arrested and detailed at the same time.
Witnesses at the meeting told the South China Morning Post Liu's wife had proclaimed her husband's innocence and sobbed as she recounted his contributions to China Gas during his seven-year career with the company.
But China Gas joint managing director Eric Leung Wing-cheong defended the decision to remove Li and Xu from the board. 'It is a vote for integrity,' Leung said after the meeting.
China Gas said Li and Xu had failed to disclose the arrests of Liu and Huang to the board.
The dismissals mean that Hai Xia no longer has any representatives on the China Gas board.
In a statement in the Post today, Hai Xia said Li and Xu had helped build the group's portfolio across 123 mainland cities in the past decade from scratch.
Hai Xia was unsuccessful in a bid to keep Li and Xu on the board despite joining forces with China Gas strategic investor, China Petroleum & Chemical Corp (Sinopec), which has a 9.92 per cent stake. The pair voted against Li's and Xu's removal.
However, other foreign shareholders, including SK Gas, South Korea's largest chaebol with a 9.7 per cent interest in China Gas, Oman Oil with 5 per cent, Gail of India with 4.6 per cent and Asia Development Bank with 3.4 per cent, voted to remove Li and Xu.
Hai Xia holds a 4.6 per cent stake in China Gas after reducing its shareholding from 6.75 per cent over the past year.
Hai Xia spokesman Andrew Fung Wai-kwong questioned China Gas' management about the fate of a piped-gas supply project in Huainan, Anhui, amid rumours that the local government had rescinded the company's operation rights after the board said last month that Li and Xu were being dumped.
Leung said the project was still operating.
China Gas shares fell 21 HK cents, or 6.14 per cent, to HK$3.21 yesterday after the shareholders' meeting.
Hai Xia has cut its stake in China Gas from 6.75 per cent last year to: 4.6%Topics: Business China Gas Holdings