1. China Aircraft Leasing under scrutiny after missing CEO quits

China Aircraft Leasing under scrutiny after missing CEO quits

Shares of China Aircraft Leasing Group Holding Ltd rose early on Monday after falling by about a fifth in the previous session when the company said it was unable to contact its chief executive, who resigned without explanation.

By: | Published: June 22, 2015 9:08 AM

Shares of China Aircraft Leasing Group Holding Ltd rose early on Monday after falling by about a fifth in the previous session when the company said it was unable to contact its chief executive, who resigned without explanation.

A nearly 20 percent plunge in the company’s shares on Friday underscores the risks in a country where corporate leaders can vanish without a trace, leaving shareholders in the lurch. The drop also comes at a time of heightened scrutiny of Hong Kong-listed firms’ corporate governance.

China Aircraft Leasing Group is partly owned by a subsidiary of state-backed financial conglomerate China Everbright Group.

Friday’s fall, which wiped HK$1.36 billion ($175 million) off China Aircraft Leasing’s market capitalization, came after the company said it had been unable to contact chief executive Poon Ho Man who had resigned on Wednesday. Shares were suspended from trading on Thursday.

On Saturday, The South China Morning Post quoted people it said were familiar with the company as saying Poon disappeared more than a month ago amid speculation he was embroiled in a corruption probe into a company client.

The stock gained around 3 percent on Monday, outpacing a 0.4 percent rise in the benchmark Hang Seng Index, and lifted by what some traders said were bargain hunters.

Some analysts, however, said they would stay cautious.

“To an outsider, we are not convinced. We will not take the risk,” said Alex Wong of Ample Finance Group in Hong Kong. “The departed executive was very senior management of the company and we can not predict what will happen next.”

A Hong-Kong based China Aircraft Leasing spokesperson told Reuters on Monday they had no further information beyond a company filing to the Hong Kong stock exchange on Friday.

In the filing, the company said CEO Poon had resigned on June 17 with immediate effect and without explanation. Chief financial officer Yu Tai Tei also resigned on May 22, with effect from June 18, “to pursue other personal goals”, it added.

The group appointed chairman Chen Shuang as Poon’s replacement and Mok Chung Tat, who joined this month, as chief financial officer.

China Aircraft Leasing’s statement said it was aware of media reports alleging Poon may be involved in investigations related to China Southern Airlines, one of its customers, but had reviewed records of interactions with the airline and found no irregularities.

It also said that it had not received notice that Poon “is under any kind of investigation” in China and that it had not been contacted by the Chinese government about any probe.

In January, China Southern said four senior executives had come under investigation for job-related crimes, a term often used as a euphemism for corruption.

Chinese President Xi Jinping has been conducting an anti-corruption drive that has ensnared officials as well as businessmen, including one who was executed in February.   ($1 = 7.7514 Hong Kong dollars)

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