Yingde Gases shares suspended from trading pending announcement

Industrial gas supplier says suspension related to certain inside information that has major implications

PUBLISHED : Tuesday, 28 February, 2017, 9:42pm
UPDATED : Tuesday, 28 February, 2017, 10:49pm

Trading in shares of Yingde Gases Group, a leading Chinese industrial gas supplier in the midst of a bitter boardroom battle between two factions, was suspended on Tuesday ahead of a pending announcement.

The suspension was pending the release of an announcement related to certain inside information, “which has implications under [Hong Kong’s securities law] on takeovers and mergers,” the Shanghai-based company said in a statement to the Hong Kong stock exchange before market opening on Tuesday.

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The share suspension comes ahead of two extraordinary shareholder meetings, scheduled for Wednesday morning next week, in Zhuhai.

The meetings will vote on resolutions proposed by the two groups of directors seeking removal of each other from the board, as they jostle to gain control, although both factions are open to an ongoing process to sell the company to the highest bidder.

This is despite concerns from some minority shareholders whether the process will be in the best interests of all shareholders, given the simmering feud.

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“This process must be run with genuine intent to maximise value for all shareholders so that minority shareholders can make educated decisions about their holdings,” said Oasis Management, a US-based private investor, which owns 4.5 per cent of Yingde.

Yingde chairman Zhao Xiangti and other executive and non executive directors who comprise the “majority board” have sought the removal of former chairman and chief executive Mark Sun Zhongguo and former chief operating officer Trevor Strutt from the board.

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“Minority directors” Sun and Strutt – stripped of their executive roles in a November board meeting in their absence - have floated a counterproposal to remove from the board Zhao and four other directors who are considered to be on his side in the feud.

Yingde shares have jumped by 85.7 per cent since the feud broke out in early January and closed at HK$5.33 on Monday, mainly on US-based rival Air Products & Chemicals’ non-binding conditional offer to buy the firm at HK$5.5 to HK$6 a share.