HONG KONG, March 7 (Reuters) - A rare Hong Kong boardroom battle escalated on Tuesday, with two of the founders and main shareholders of Yingde Gases Group filing a police complaint against the company’s chairman, ahead of a shareholder meeting seeking to change its board of directors.
Sun Zhongguo and Trevor Strutt, two of Yingde’s founders and main shareholders, said in a statement they applied to the Commercial Crime Bureau, a unit of Hong Kong’s police that investigates commercial fraud, to investigate Zhao Xiangti, another co-founder and major shareholder.
Sun and Strutt called on the police “to investigate possible criminal activities including false statement, fraud, and threatening investors” by Zhao and others and applied for the safeguard of Yingde’s chops, or signatory stamps, and financial records, the statement added.
Yingde said in a separate statement that Zhao informed the company “the allegations are baseless and spurious,” adding that “he believes the allegations are nothing more than a diversionary tactic, deliberately announced one day before the EGMs, to distract all parties from the ongoing sale process.”
Yingde shareholders are set to meet on Wednesday during two separate extraordinary general meetings (EGMs), one to decide on the removal of Sun and Strutt from the board of directors and a separate meeting one hour later to vote on the removal of Zhao and four other directors.
Sun and Strutt, previously the Chairman/CEO and COO of Yingde, respectively, were relieved from their posts during a November board meeting that named Zhao chairman of the company and have since been in a legal fight to get reinstated.
About one month later, in late December, U.S. industrial gas maker Air Products made a takeover approach of as much as $1.5 billion in cash for Yingde.
The company has been involved in a takeover battle in recent months rarely seen in Hong Kong, with the latest twist taking place last week when Hong Kong-based private equity firm PAG agreed to buy the combined 42.1 percent stake of Zhao, Sun and Strutt for $616 million.
On Monday, Yingde said Chief Executive He Yuanping resigned, but he will remain a director of the company until the completion of a strategic review that may result in the sale of one of China’s largest industrial gases firms.
Reporting by Elzio Barreto, editing by Louise Heavens