It is only a few months since Huang Guangyu, who was once anointed China’s richest man, was sentenced to 14 years in jail after being convicted of bribery, insider trading and illegally buying foreign currency in a Beijing court.
Landing in the Big House would be enough to stop most entrepreneurs in the tracks. But not Huang, the founder and major shareholder of Chinese electronics giant Gome Electrical Appliances Holdings.
In an extraordinary corporate move, Huang has attempted to overthrow the company’s chairman from his jail cell, and install his sister and his lawyer as the company’s leaders.
Huang’s rise and fall from grace has been spectacular. The son of peasant workers from the south of China, Huang and his brother dragged themselves up from selling small electrical goods on the side of the road outside Beijing to owning one of the biggest electrical goods companies in the country.
But a series of government investigations led to Huang’s imprisonment in May.
He may have been down, but he wasn’t out. Along with his wife, Huang still owns 32.5% of the shares in Gome (a stake worth $US1.74 billion) and he clearly wants an on-going say in the company’s fortunes.
After disagreeing with the current chairman over store opening – and being sued by Gome for breach of trust – Huang made his move against the company’s chairman.
This morning, that bold play failed when shareholders voted his proposal to remove the chairman down. However, he was successful in preventing Gome from getting a mandate to sell more shares, a move which would have diluted Huang’s stake.
Gome’s shares rose 4% after the vote, but the shares remains down 12% this year.
Amazingly, Huang hasn’t completely given up on attacking the company’s top brass.
“Nothing has changed about our concerns regarding the unrepresentative nature of the board, and we reserve all our rights to take appropriate action to protect our interest,” Huang’s representatives said in an emailed statement to Bloomberg.
There are also suggestions he could try to buy more shares in Gome to build his voting power.
This amazing saga may well have a few chapters left.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
Comments