The strained relationship between Brilliance China's top four executives and the Liaoning Provincial Government stems from fundamental issues, including the parent company’s overhead management rights and the annual 10 million yuan allocated to the Yangon Times. These factors have made it difficult for the executives to align with the new ownership. In late August, Su Qiang, President of Brilliance China (1114, HK), appeared at the Zilan Hall of the Great Wall Hotel in Beijing. Rumors had circulated that high-level executives were planning to collectively sell their shares and resign, prompting Su Qiang to address the media. His appearance was marked by a stiff demeanor and scripted remarks, avoiding direct responses to the rumors about share sales and resignation. After his brief speech, he looked to the host, who quickly ended the event with a statement: “We are busy and moving forward.†The crucial clarification left many questions unanswered.
From October 2003 to July this year, the four executives, including Wu Xiao'an, Chairman of Brilliance China’s Board, and Su Qiang, sold their shares. They were once part of the old team led by former Chairman Yang Rong. Now, they hold only share options granted by the Liaoning government. This move triggered sharp stock declines in both New York and Hong Kong. On August 2nd, Brilliance China issued a statement denying any resignation and attributing the share sales to “personal reasons.†However, on the same day, the company lost over 1 billion HKD in market value, with trading volume surging to a record high.
A source close to the company revealed that in October last year, the executives initially planned to exercise their share options and sell them. However, due to low interest rates and a flood of hot money, the company opted to issue convertible bonds instead. Management eventually gave in to the company’s decision. But due to the terms of the bonds, they couldn’t trade shares for three months, delaying the sale further. After the performance report in April, the share price dropped, missing the best opportunity.
According to reports, the four executives have now resigned and returned to Shenyang, Liaoning, for negotiations. A preliminary agreement has been reached: Su Qiang and others will stay until the end of the year to maintain investor confidence. However, the underlying structural issues remain unresolved. As one insider noted, the tension between the executives and the Liaoning government has deep roots. Since 2002, when Liaoning formally took over Brilliance assets, the executives enjoyed significant power, status, and compensation—far exceeding that of the parent company’s leadership.
The parent company was essentially an empty shell, with the executives operating almost independently. Their salaries and bonuses also raised concerns. From 2001 to 2003, their incomes skyrocketed, while the parent company’s executives earned far less. This imbalance created friction and suspicion of mismanagement.
Liaoning’s recent shift in attitude toward the executives is evident. The government has delayed the exercise of share options, citing concerns over state asset losses. Additionally, the sale of shares to Citigroup in October 2003 further complicated the situation, leading to accusations of a “sell-off resignation.â€
As Liaoning seeks new shareholders to break the existing power structure, the future of the four executives remains uncertain. Their share sales have become a tool of pressure against the major shareholder. With the year drawing to a close, more clarity may emerge soon.
blank label,blank roll labels,blank sticker labels,blank address labels,blank nutrition label
Zhuhai Yingwei Packing Products Co., LTD , https://www.yingweipacking.com