The case of China’s vanishing chairmen
“We have lost contact with our chairman,” is an awkward disclosure from the board of a listed company to its investors. It can lead to a collapse in the share price. In China the resulting confusion can persist for months, casting a shadow over the company’s future. Such announcements have become so common this year that a state-owned newspaper, Securities Times, has offered advice to directors dealing with a disappearance. “Don’t be coy when it comes to disclosing these matters,” the paper said in November. It reminded firms that they have a responsibility to keep investors informed of any major incidents affecting their operations. This includes an inexplicably uncontactable chairman or chief executive.
Two separate listed Chinese companies—a children’s-fitness firm and an agricultural one—warned investors on November 29th that their chairmen had vanished without a trace. The fitness company, My Gym Education, said that it “tried communicating via phone and WeChat messaging but could not reach Wang Hongying”, its chairwoman. “After communicating with her family, the company has been unable to determine the reason for the loss of contact with her.”
These latest incidents followed two other freak disappearances at a live-streaming company and a drugmaker earlier that month. All told, at least 11 listed Chinese companies have been forced to put out disclosures this year, alerting investors to the disappearance of executives or board members. A review of corporate disclosures and Chinese media reports indicates that this odd phenomenon has become more common in 2023.
2023-12-07 09:46:10
Article from www.economist.com
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