×
Newsmax TV & Webwww.newsmax.comFREE - In Google Play
VIEW
×
Newsmax TV & Webwww.newsmax.comFREE - On the App Store
VIEW
Tags: feud | shares | china

Father-Son Feud Wipes $2B From Shares of China Meat Giant

An elderly stockholder looks at the stock market data on a computer screen in a security business hall.

A feud between the chairman of WH Group Ltd. and his son over succession and management issues has wiped out more than $2 billion of market value of the company. Shares of WH Group in Hong Kong have plunged 17% in two days. (Sheldon Cooper / SOPA Images/Sipa USA)

Thursday, 19 August 2021 08:19 AM

A bitter family row between the chairman of WH Group Ltd. and his son over succession and management issues has wiped out more than $2 billion of market value in the world’s largest pork processor.

Shares of WH Group in Hong Kong have plunged 17% in two days to the lowest in almost three years after an article purportedly written by Wan Hongjian, the 52-year-old son of the company’s founder and top shareholder Wan Long, which accused his father of financial misconduct. Henan Shuanghui Investment & Development Co., its mainland-listed unit, also slumped.

The article, posted Tuesday on the WeChat account of “New Meat Industry,” alleged that Wan senior failed to disclose $200 million in taxable income, which WH Group has denied. The report came days after the 80-year-old Wan stepped down as chief executive, handing over to chief financial officer Guo Lijun. The group owns U.S. pork supplier Smithfield Foods Inc., which it acquired in 2013.

The accusations are “untrue and misleading,” WH Group said in a statement Wednesday. The company added that it reserves the right to take legal action against the younger Wan or any other persons responsible for the allegations.

In the article widely cited by Chinese media, Wan Hongjian also questioned the capabilities of new CEO Guo in trading and management. Wan Long expressed confidence in Guo’s appointment during a media briefing last week, adding that he will assist with the smooth transition. WH Group didn’t respond to an email seeking further comment.

The younger Wan was removed from his role as director and vice president in June. WH Group cited “misconduct” for his termination, adding that he demonstrated “aggressive behaviors” toward the company’s properties and was unable to fulfill his duties as director of skill, care and diligence.

Buy Rating

The market has been overconcerned about the impact of Wan Hongjian’s allegations, according to Citigroup Inc., saying that the focus should be on the group’s plan to buy back about $1.9 billion worth of its shares, which has become unconditional. The bank reiterated its buy call on the stock amid expectations for a business recovery in the second half, as well as easing concerns over the management transition.

The new generation of top management are all “promoted from within” and have a long, proven track record with the company, Citigroup analysts including Xiaopo Wei said in a note. The new leaders include CEO Guo and Wan Hongwei, the younger son of Wan Long, who’s been appointed as deputy chairman.

© Copyright 2021 Bloomberg News. All rights reserved.


StreetTalk
A bitter family row between the chairman of WH Group Ltd. and his son over succession and management issues has wiped out more than $2 billion of market value in the world's largest pork processor. Shares of WH Group in Hong Kong have plunged 17% in two days to the lowest...
feud, shares, china
415
2021-19-19
Thursday, 19 August 2021 08:19 AM
Newsmax Media, Inc.
Join the Newsmax Community
Read and Post Comments
Please review Community Guidelines before posting a comment.
 
TOP

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved
NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved