After days of decline, cosmetics maker Shanghai Jahwa Group Co Thursday finally saw its shares jump up, mainly thanks to its recently dismissed chairman disclosing that he has reached a compromise with the group's controlling shareholder.
The Shanghai-based company's listed unit held a shareholder meeting Thursday at which Ge Wenyao, now no longer chair of the group, said he will nevertheless continue on as chairman of its listed unit, and will repair relations with the majority shareholder to protect the interests of the company and investors.
Shares closed up by 3.32 percent, Jahwa's first increase this week.
Jahwa held a board meeting over the weekend at which shareholders decided to dismiss Ge from the post of chairman and general manager of the parent company.
China Ping An Trust Co, a trust unit of China's second largest life insurer Ping An Insurance, released a statement Monday saying a deputy general manager of Ping An Trust would become the new chair of the cosmetics group.
Ping An also accused members of Jahwa's management of embezzling funds from the group.
The statement came after Ge complained on Sina Weibo Monday that "Jahwa is suffering from a political disturbance" and "Ping An has continually sold assets of Jahwa after the acquisition."
As the clash became public, Jahwa's shares slumped severely, even hitting their daily limit on Wednesday.
Some investors backed Ge and blamed Ping An for seeking quick money instead of focusing on the group's development, saying that Ge has been working at the company since the 1980s and contributed greatly to its growth.
"Because Ge and Ping An have large unresolved conflicts, as evidenced by the way they accused each other in public, the company's future may be gloomy," Zhang Bingwu, an expert in cosmetics and general manager at Guangzhou Taking Advertising Co, told the Global Times Thursday.
Jahwa declined to comment on the issue when contacted by the Global Times.
Ping An Trust bought State-owned Jahwa in a deal valued at 5.1 billion yuan ($830 million) in November 2011, making it the controlling shareholder of Jahwa's Shanghai-listed unit.
Last year, Ge developed plans to start expanding Jahwa into a fashion company by buying a Chinese watch brand. But the plan never went through, which Ge attributed to lack of support from Ping An.
Since then Ge has expressed his dissatisfaction with Ping An on Sina Weibo.
"As a group chairman, Ge's behavior is immature. Everyone knows that if the executive of a listed company wants to say something about the company, he or she should at least disclose it via the stock exchanges, which are deemed to be the formal platforms for releasing company news," Wang Shixiong, a guest commentator at China Business Network, told the Global Times.
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