New | Bitter boardroom battle in China Shanshui Cement sees old board thrown out as accusations fly
Receiver accuses chair Zhang Bin and father of using ‘poison pill’ to damage company
The battle for control of the China Shanshui Cement Group has gotten a lot uglier as shareholders threw out the entire board controlled by chairman Zhang Bin and appoint a new set of officials.
One group voted to oust the entire board and appoint new directors, while a receiver of its second largest shareholder accused ousted chairman Zhang Bin and his father and company founder Zhang Caikui of illegally changing its main operating subsidiary’s article of association to tighten their grip.
In the latest twist of a seven-month long brawl, 96 per cent of shareholders votes cast in a meeting on Tuesday chose to throw out all eight directors of the firm including Zhang Bin, and to appoint nine new ones. Zhang’s father had already been ousted by shareholders in October.
After the maiden meeting of the new board following the vote, Stephen Liu Yiu-keung, managing director of transaction advisory services at accountancy EY and a receiver of parent China Shanshui Investment, said the amendment of the article of association took place on October 14.
“It was a last ditch attempt by the two Zhangs to create problems for China Shanshui Cement’s shareholders ... they have tried every means to prevent the other shareholders from exercising their rights, it is one of the most outrageous examples [of corporate misdeeds] I have seen,” Liu said.
The two Zhangs, through China Shanshui Investment, own less than 5 per cent of China Shanshui Cement, but control the latter’s board and have done things that damaged the interest of the remaining 95 per cent shareholders, he alleged.