Saturday, 1 April 2017

Huishan: all INEDs resign at the same moment, coincidence?

China Huishan Dairy Holdings has been lately in the news, for all the wrong reasons (for instance here, here and here).

The company made an announcement regarding several issues at hand. One of them was the resignation by all four independent non-executive directors.

  • Mr. Song would like to spend more time on his other business and commitments
  • Mr. Gu is getting increasingly busy with his other commitments and is afraid he may not have sufficient time to perform his duties as an INED
  • Mr. Tsui would like to concentrate on his company’s business and personal commitment which requires more of his dedication
  • Mr. Kan would like to concentrate on his other own commitments which require more of his dedication

It must be noted that every statement is different which seems to add to the credibitly of each one.

I strongly doubt though the sincerity of the reasons stated. Surely the real reason is that the company is in turmoil and the INEDs don't want to get dragged into the matter any further.

The fact that all four resign exactly now can not be a coincidence.

I am very much against these kind of "useless statements", if the directors don't want to give the true reason then a simple statement like "no comment" is much better. At least the reader does not feel like he is taken for a fool.

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