Beleaguered China-based Huishan Dairy, which has been rocked by allegations of misappropriation of funds and director resignations in recent weeks, has announced the appointment of several new directors to its board.
Chairman and majority shareholder Yang Kai will remain chairman of Huishan Dairy.
He will be joined by Chu Kin Wang Peleus, Cheung Ngai Lam – chief financial officer of Chian Zenizx Auto – and Chung Wai Man as independent non-executive directors.
The Hong Kong-listed Huishan Dairy had been left with only two directors after eight stepped down from the board between the end of March and the early weeks of April, although some had remained in executive roles.
The resignations had left chairman and majority shareholder Yang and Ge Kun, the executive director in charge of treasury and cash operations, as the two members of Huishan Dairy’s board.
However, at the end of May, Huishan Dairy announced Yang had decided Ge had left her role after not being able to contact her since March.
Huishan Dairy has not been able to contact Ge since she wrote to Yang on 21 March to say she would take a leave of absence due to “recent work stress”, which “had taken a toll on her health”.
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It was on 24 March when Huishan Dairy halted the trading in its shares in Hong Kong after the company’s stock plummeted by over 85%.
The slump was reportedly due to a short-seller attack. The fall in the value of Huishan Dairy’s shares had come after allegations a “major shareholder” in Huishan Dairy had used CNY3bn on the dairy firm’s balance sheet to invest in Chinese real estate and was unable to recoup the money.
The following week, Huishan Dairy provided an update on its financial position, revealing it had met with its creditors after missing interest payments.
However, in a stock market filing, Huishan Dairy said it “does not believe” there has been “any misappropriation”, while it has met with government officials and creditors to discuss its payments.
Last month, Huishan Dairy received notice from the Hong Kong Stock Exchange that trading in its shares would be suspended indefinitely.
Huishan Dairy said today the Hong Kong Stock Exchange had set conditions before trading could resume, including informing the market of all material information, demonstrating it has put in place adequate financial reporting procedures and internal control systems, as well as publishing all outstanding financial results and address any audit qualification.