Top executives from Chinese shoemaker Ultrasonic missing
Governance concerns grow as top officials at Germany-listed shoemaker have disappeared, along with cash on the mainland and in Hong Kong
A Germany-listed shoemaker became the latest Chinese company to report the disappearance of top executives, underscoring the danger of doing business in China at a time corporate governance is under scrutiny.
Frankfurt-listed Ultrasonic said chief executive Wu Qingyong and chief operating officer Wu Minghong had been missing since the weekend, and most of its cash reserves in mainland China and Hong Kong had disappeared.
The mystery is likely to fuel concerns about corruption and corporate malfeasance in China as short-sellers increasingly target smaller Chinese firms with claims of falsified financial statements and other dubious practices.
"Most of the company's cash funds at [People's Republic of China] and Hong Kong levels have been transferred, being no longer in the company's range of influence," Ultrasonic said in a statement.
Its German holding company still had a "relevant six-figure amount" at hand to meet its payment obligations, it added.
Ultrasonic shares plunged 72 per cent in high volume on Tuesday after the announcement.
There were fears for the status of a US$60 million credit facility that the company, valued at US$29.5 million, secured from Nomura International (Hong Kong) in August to help fund acquisitions.