NVC retakes Chongqing factory, finds million of yuan withdrawn from bank accounts
Lighting manufacturer uncovers missing cash after regaining control of Chongqing factory
TOH HAN SHIH
PUBLISHED : Friday, 07 November, 2014, 12:16pm
UPDATED : Saturday, 08 November, 2014, 4:23am
Former NVC Lighting chairman We Changjiang speaks a few years ago at a company video conference. The former NVC founder is involved in a battle with the current board over control of the firm and its funds. Photo: Jonathan Wong
Directors of NVC Lighting Holding, which is embroiled in a tussle between its chairman Wang Donglei and founder Wu Changjiang, have retaken control of the company’s factory in Chongqing and discovered hundreds of millions of yuan withdrawn from the company’s coffers in relation to loan pledges allegedly made by Wu without the board’s knowledge.
In a stock exchange announcement on Thursday, the mainland’s biggest lighting manufacturer confirmed that police in Huizhou, Guangdong province, where the company has a factory, are conducting a criminal investigation into Wu over potential misappropriation of unspecified assets.
NVC shareholders voted Wu off the company’s board in August.
The company’s shares have been suspended from trading since August 11.
NVC regained physical control of its factory in Chongqing, which was previously held by Wu, and production was expected to resume in the near future, the company announced.
NVC also took control of its former headquarters in Chongqing from Wu on October 22.
After resuming control of mainland subsidiary NVC Lighting (China), a raft of bank withdrawals and loan pledges were found made without the board’s knowledge, NVC said.
“Investigations indicated 230 million yuan (HK$291 million) kept in NVC’s account with the Chongqing bank was withdrawn around the end of August,” it said.
The unauthorised withdrawal was related to three pledge agreements made by Wu, it said.
The company also discovered 165 million yuan was withdrawn in August from another bank in Chongqing. This withdrawal was linked to five pledge agreements also made by Wu.
NVC found 53 million yuan at a third bank frozen by a court. The money was related to a guarantee that Wu allegedly concluded with the bank on behalf of NVC in March. It was also linked to an 80 million yuan loan from the bank to a lighting manufacturing firm in Chongqing.
“The company is taking urgent steps to obtain more details on the circumstances in which the above funds were withdrawn or frozen, the circumstances under which the above pledge and guarantee agreements were entered into,” NVC said.