Jewellery maker 3D-Gold plunges 60.12pc after chairman's death

Shares in 3D-Gold Jewellery Holdings, formerly Hang Fung Gold Technology, sank as much as 67.5 per cent yesterday after trading resumed following the sudden death of founding chairman Lam Sai-wing on Friday.

The stock was down 60.12 per cent at 65 HK cents from its previous close of HK$1.63 before trading was suspended in the afternoon, pending the announcement of price-sensitive information. 'Lam had been actively involved in the daily operation of the company, so [his death] will bring uncertainty in the company's outlook in the near term,' said Carrie Chan, a consumer analyst at ICEA Securities.

Lam Chan Yam-fai, the wife of Lam and co-founder of the Hong Kong-based jewellery maker and retailer, has been appointed as chairman.

The company also said a number of its banking trust receipts, gold loans, revolving loans and term loan facilities became technical defaults because of Lam's death and might be terminated.

Last month, the principal amount outstanding was about HK$422 million. The company said it was optimistic that creditors would be supportive.

However, a recent Credit Suisse report said 3D-Gold was among a group of Hong Kong small-cap companies that failed its cash-flow test, suggesting that the firm may be unable to service its short-term debts and was vulnerable to cash calls.