image

Xi Jinping's anti-corruption campaign

Chinese meat processor Yurun Food’s shares surge as missing boss, Zhu Yicai, returns home after almost four years

  • Yurun’s share price shot up by 29 per cent after boss returned home
  • Zhu vanished in March 2015, reportedly detained by Chinese authorities and investigated for corruption
PUBLISHED : Wednesday, 23 January, 2019, 6:26pm
UPDATED : Wednesday, 23 January, 2019, 6:26pm

Yurun Food Group, a mainland Chinese meat producer, surged 28.9 per cent on Hong Kong’s stock exchange after announcing its chairman, Zhu Yicai, had returned home almost four years after he went missing.

“On the afternoon of 22 January 2019, the company received notice from the family members

of Mr. Zhu Yicai, the honorary chairman and the senior adviser to the board, that Mr. Zhu has returned home,” the company said in a filing to the Hong Kong stock exchange on Tuesday night.

Zhu, one of China’s wealthiest tycoons, vanished in March 2015 and was not heard from again, reportedly detained by authorities as part of an investigation into corruption.

Zhu owns 25.82 per cent of the listed company, the filing said.

China detains CEFC’s founder Ye Jianming, wiping out US$153 million in value off stocks

The stock price of Yurun shot up on Wednesday as turnover surged, closing 28.9 per cent higher at HK$1.07, the highest since last August.

Another company controlled by Zhu, Shanghai-listed Nanjing Central Emporium surged by 10.05 per cent, hitting the daily limit, to close at 4.49 yuan.

Mainland media has linked Zhu’s disappearance with Beijing’s widespread crackdown on corruption. Caixin on Wednesday quoted unnamed sources as saying Zhu had been released after being tried by a court in Hangzhou, in east China’s Zhejiang province.

Zhu was charged with three counts of bribery, breach of credit to damage the interests of listed companies and intentional destruction of accounting documents, but was only found guilty of the latter charge, the report said.

Yurun Food Group was founded by Zhu and started out as a small meat processing workshop in Hefei, in east China’s Anhui province in the early 1990s. The company expanded by acquiring competitors including a state-owned canned food producer in 1996, and went public in Hong Kong as early as 2005.

Zhu was ranked the 24th richest person in China by Forbes in 2005. Ten years later, he was ranked No. 202 in Forbes’ Chinese billionaires list with an estimated fortune of US$1.5 billion.

Yurun faces barrage of questions over governance

On March 26, 2015, Yurun told the Hong Kong bourse that Zhu, then aged 51, the single largest shareholder of the company and a director of certain key operating subsidiaries, had been detained by a “procuratorate in the People’s Republic of China”. A procuratorate is a public institution responsible for both investigating and prosecuting in such cases.

“Zhu has been required to stay at a designated residence in China since 23 March 2015,” the company said in a filing last March. It added that it had received no information regarding the circumstance of the incident, or had any contact with Zhu.

According to an interim report issued by Yurun, gross profit increased by 15.5 per cent year on year to HK$421 million in the first six months of 2018, mainly thanks to sales of chilled and frozen pork, and processed meat products.

business-article-page