Appliance maker dismisses reports of disagreeing with regulator's findings amid investigation for securities fraud Guangdong Kelon Electrical Holdings, under investigation on the mainland for alleged securities fraud, denied that chairman Gu Chujun was planning to sell his stake in the troubled appliance manufacturer. In a statement filed with the Hong Kong stock exchange, the company also dismissed reports that its directors had objected to investigative findings by the China Securities Regulatory Commission (CSRC), saying that it had received no indication that the investigation had been concluded. 'Neither [major shareholder] Guangdong Greencool and its beneficial owner, Mr Gu, has entered into discussions with other companies in relation to a sale of its shareholdings in [Guangdong Kelon Electrical Holdings],' the statement said. The announcement also noted media reports that it was having trouble obtaining working capital and raw materials for its manufacturing operations, but did not deny them, saying only that 'the directors ... are looking further into the financial, production and trading position of the group'. A manager at Galanz Group, a large appliance maker in Kelon's home base of Shunde in Guangdong, told the South China Morning Post that suppliers had halted deliveries to Kelon because they believed the firm could not pay. 'Kelon's production has dropped a lot because there are few materials available to it,' he said. A number of managers and factory workers had left Kelon recently, the Galanz manager said. 'I know, because Galanz hired some of these managers.' Kelon is China's biggest refrigerator producer and a key producer of air-conditioners. At Kelon's annual general meeting in Shunde on Tuesday, angry shareholders voiced unusually strong opposition to management-sponsored motions, observers said. The report of Kelon's supervisory committee, for example, was opposed by 20.19 per cent of the voting shares. A company proposal to pay no dividend for last year in light of the company's net loss of 44.66 million yuan in the period faced opposition from 18.91 per cent of the voting shareholders. Holders of Hong Kong H shares were more willing to oppose management than their A-share counterparts. Almost 10 per cent of Hong Kong voting shares rejected the firm's financial statements for last year, while 99 per cent of voting A shares accepted the results. Deloitte Touche Tohmatsu issued a qualified opinion on the results and resigned as Kelon's auditor last month, questioning hundreds of millions of yuan of sales. However, the shareholders unanimously voted for proposals to toughen corporate governance and disclosure. Kelon's Hong Kong shares have been suspended from trade since June 16. Meanwhile, JP Morgan Chase progressively cut its stake in the company to 4.47 per cent as at June 10 from 19.02 per cent on January 6.