The chief executive of failed toymaker Smart Union Group (Holdings) will take a position with rival Wah Shing Toys next month. An official announcement of Lo Kwok-choi's appointment as managing director of Wah Shing will be made on November 1. Mr Lo was previously Wah Shing's managing director before moving to Smart Union in June 2003. Smart Union is working to wind up its operations after shutting its plants amid cash flow problems. More than 6,500 workers are owed wages. 'The management of Smart Union was aware there was this job opening for me. They knew I would go to Wah Shing at some point in time,' Mr Lo said, adding his decision was personal. Wah Shing was set up in 1976 and operates six mainland factories. The firm is a subsidiary of South China Holdings, which is listed in Hong Kong. Hong Kong-listed Smart Union recorded a profit of HK$5.44 million last year in its annual report, down from the HK$30.63 million in 2006. In the first half of this year, the company said it had suffered a loss of HK$200.56 million. Last week, its three factories in Dongguan and Qingyuan closed, leaving thousands of workers shocked. 'There have been some cash flow problems over the past one or two years. With a tighter credit market and concerned suppliers, the company failed,' Mr Lo said. Thousands of the company's workers in Dongguan gathered outside the plant in Zhangmutou on Thursday to demand their unpaid wages and also rallied outside the local government headquarters. They dispersed on Saturday after the town's government paid out more than 8 million yuan (HK$9.1 million) in back-pay. According to the Zhangmutou government, Smart Union owed its workers in two factories in Dongguan at least 24 million yuan. Meanwhile, a spokeswoman for the Labour Department said Smart Union, headquartered in Sheung Shui, had about 60 employees in the city. 'All affected employees will file their cases with our office in Sha Tin and the department will help them to claim back unpaid wages from the Protection of Wages on Insolvency Fund.'