Yangzijiang chairman takes leave to assist in 'confidential' probe

Singapore

YANGZIJIANG Shipbuilding (Holdings) said that its executive chairman, founder and controlling shareholder Ren Yuanlin has taken leave to focus on "assisting in a confidential investigation carried out by certain PRC governmental authorities".

The company, China's largest non-state owned shipbuilder, said that Mr Ren Yuanlin, 66, was granted a leave of absence since Aug 9 by the board to expedite the completion of the investigation so that he may resume his full-time duties with the group as soon as possible.

Yangzijiang also tamped down on rumours about its chief.

In response to queries by the Singapore Exchange Regulation (SGX RegCo), it said in a statement on Wednesday that Mr Ren Yuanlin had been making major decisions on company matters until as recent as Aug 8, including approving the group's unaudited second quarter financial results that was released on Aug 5.

Ren Letian, who is group chief executive officer and alternate director to Mr Ren Yuanlin, will assume his father's role as a director in his absence.

Based on enquiries as well as legal advice, Yangzijiang said that none of its directors including Mr Ren Yuanlin, its executive officers or any company in the group are the subject of the investigation. None of them, apart from Mr Ren Yuanlin, have been requested by any PRC governmental authorities to assist or be involved in the investigation.

It added that the group's businesses and operations are unaffected by the investigation and Mr Ren Yuanlin's leave of absence.

"It is business as usual for the group's businesses and operations," Yangzijiang said.

Its unit Jingjiang Runyuan Rural Micro-finance Co Ltd "continues to operate its financing business and it is business as usual for the group's financing division".

Yangzijiang didn't elaborate further on the probe in China.

Two weeks ago, global shipping news service TradeWinds reported that Liu Jianguo, described as a "veteran political patron of the shipbuilding industry", was being probed for "serious disciplinary violations".

Tradewinds said this came from a statement in June by Beijing's Central Commission for Discipline Inspection, the Communist Party of China's own powerful anti-graft body. Mr Liu is chairman of the management committee of the Jiangsu Yuanlin Charity Foundation set up by Mr Ren Yuanlin.

Wednesday's announcement clears the air on swirling market talk that trouble in some form had been brewing at the shipbuilder. Investor anxiety turned into an exit stampede, with the stock tumbling by nearly 30 per cent last Thursday on unusually heavy volumes that swiftly drew a query from SGX RegCo and soon after, a trading halt.

The shipbuilder said that trading on the counter will resume on Thursday.

In its statement on Wednesday, the group also warned of possible legal action, saying it has instructed Duane Morris & Selvam LLP to provide legal advice to the board and the company in relation to "rumours" about Mr Ren Yuanlin and the group that were spread on certain publications.

"The company reserves the right to commence any proceedings and take any actions for any and all causes of action arising from any falsehoods spread in order to protect the reputation of the group and its directors," it added.