Ms Jane Chan Yam Fai, Chairman and executive director of the Company, has resigned as Chairman of the Board. She remains as an executive director of the Company though.
I suppose this is more or less symbolic. The provisional liquidator has gained control of the company already and there is nothing much she can do even when she is the Chairman.
It just caught my surprise that Hang Fung Gold is on a string of negative news today:
First of all, Hang Fung Gold released an announcement last night (14 Oct) saying that:
Significant trade receivables in its wholesale business “may be difficult to recover”, and that “the amount of their inventory might be substantially less than previously reported.”
Deloitte is appointed as independent accountant to conduct investigations on the company’s assets and liabilities.
Creditors (led by HSBC) have formed a steering committee.
Secondly, probably due to the company announcement, Moody’s and S&P both downgraded Hang Fung Gold to ‘Ca’ and ‘D’ respectively.
Lastly, tonight’s TVB 11:30pm news said that:
Mitsubishi UFJ Bank has submitted a claim of HKD 24 million in the High Court of Hong Kong this past Monday.
Today the police has arrested five employees of Hang Fung Gold (the wife of the deceased Chairman Lam Sai Wing being one of the five arrested) for stealing gold bars that are worth HKD 179 million.
What was she thinking? After the death of her husband, she is now the chairman of the Company and basically she is just robbing her own company. Hasn’t she heard of the word “embezzlement” and its consequence?
From all these signs, I will not be surprised if some banks will call to liquidate Hang Fung Gold soon. Is the jewelry sector particularly hard for auditors to examine their books? With the fall of Peace Mark, this will be the second listed company in this industry that are in trouble.
People would think that the Hang Fung Gold (870) saga would go away as the funeral of Lam Sai Wing (former Chairman of Hang Fung Gold) was held yesterday. But then on today’s newspaper, it was revealed that the police was investigating an embezzlement of HKD 200 million from the management of 870. Does it mean that someone in the management is taking advantage of the situation and tried to take away big sum of cash from the company?
Seriously investors should shy away from this type of company, even when the share price has dropped more than 60%.
Lam Sai Wing, chairman of Hang Fung Gold (870), was found dead inside the bedroom of his apartment on Bowen Road on September 26 2008. His bedroom was locked inside and the media so far does not seem to know the exact cause of death. Natural Death? Illness? Suicide? Murder?
This man is famous for his gold toilet, gold bathroom sink, and gold chariot. Kelly Chan, a famous singer who is getting married today, has been the spokesperson for Hang Fung’s retail outlet, 3D Gold, for years. Her wedding today must be full of gold decorations because of 3D Gold’s sponsorship. I wonder Kelly would feel strange or awkward if she wore jewelry supplied by 3D Gold in her wedding.
870’s share price tumbled from 1.63 to 0.65 on Tuesday due to Lam’s sudden death. And there are reports saying that outstanding loans to the company is now in technical breach because of the chairman’s death. The company has quite high leverage (debt / equity > 100%) and with the overly conservative attitude of banks in this bear environment, it is not surprising that the company may have liquidity problem if some banks decide to ask the company to repay its loans immediately.
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