Boring printer's showbiz foray gets director's thumbs-down
For 30 years, Chung Tai Printing Holdings has been a stable but boring Hong Kong-listed company. That is until yesterday, when it acquired a more entertaining but rather unpredictable business.
The label and plastic card printer, owned by the Suek family, announced it had acquired Neway Entertainment Group from its controlling shareholder, which also happens to be the Suek family, for HK$65 million.
Chung Tai is to change its company name to Neway Group, although the more profitable karaoke chain business is not involved in the deal. The acquired business includes the licensed karaoke music videos and the popular young girl group Hotcha, which only started in 2005.
The diversification came after Chung Tai announced a profit warning two months ago because of its over-exposure to the falling Australian dollar. The printing firm suffered a 90 per cent drop in interim profit to HK$3.5 million as of September 30 last year.
It must be a challenging time for 30-year-old chief executive Ernie Suek Ka-lun, who took over 19 months ago from his father, founder Christopher Suek Chai-kit, who remains a non-executive director.
Chung Tai is a typical Chinese family-run business. Three of its four executive directors are family members - the founder's son, sister-in-law and brother. Ditto for three out of four non-executive directors, including Suek Che-hin, the founder's 86-year-old father.
Under such a closely held structure, one might expect no one to stand up against buying a toy for the young owner.
But according to the firm's statement, independent non-executive director Alfred Au Yin disapproved of the transaction. He was not convinced the price was reasonable and justified, especially because of the lack of a track record and the unattractive and shaky prospects for Neway's earnings.
Mr Au, an accountant with 36 years' experience who joined the board in 2007, worried that the transaction, which did not require independent shareholders' approval, might be seen as a move to channel cash from Chung Tai to the Suek family.
Ernie Suek tried to convince his director that prospects were rosy, but Mr Au stood firm.
As a compromise, Chung Tai requested, and the Suek family agreed to, a 'put option', whereby Chung Tai could sell Neway back to the family after two years.
Shares of Chung Tai went up 4.76 per cent yesterday to 33 HK cents. They have risen 358.33 per cent in the past two months to a record high since they were listed in 1992.
We wonder whether Chung Tai's shareholders are getting used to the sharp rally - and might like to cash out at this once-in-a-lifetime moment.
China Investment Corp is hunting talent from Wall Street and Bond Street.
The state-owned sovereign wealth fund put a global recruitment advertisement in the Financial Times and the Wall Street Journal seeking highly qualified professionals in more than 33 categories for 13 departments.
That is a big deal, given the mess on Wall Street, but there is a catch.
The ad directed people to a website that said the fund was looking for people who could use Chinese as a working language. In fact, the online recruitment site is largely in Chinese.
CIC has about 200 staff, managing about US$200 billion of assets.
Next Media's magazine or Apple Daily reporters should be a bunch of happy employees.
Flipping through five pages of Next Media's latest annual report on the staff working environment and charity efforts leaves the impression that chairman Jimmy Lai Chee-ying (left) is a fine and caring boss. The annual report even claimed that Next Media has earned an enviable reputation as a preferred employer in the media industry.
The media group, which employs 3,677 people, said it installed an open-air barbecue area and a 'superbly-equipped' fitness centre with a swimming pool and multifunction athletic court at its Hong Kong office, where weekly yoga and tai chi classes are held. (It even mentioned Chinese desserts distributed on Mother's Day and Father's Day - how considerate!)
The boss's generosity has shown up on pay cheques - Taiwan Apple Daily chairman Ip Yat-kin (HK$7.4 million), retiring editor Tung Chuen-cheuk (HK$6.75 million) and chief financial officer Stephen Ting Ka-yu (HK$4.57 million) were all paid more than Mr Lai, who made HK$4.29 million last year.
So Lai See reckons life in Tseung Kwan O isn't so bad.