First response to NVC lighting upswings

The Hong Kong-listed company NVC Lighting Holdings Co., Ltd. (02222.HK, hereinafter referred to as NVC Lighting) has been the focus of media and investment circles since its sudden release of the company’s founder Wu Changjiang’s resignation news in January. Last week, Wu Changjiang accepted media interviews and revealed that he "does not want to disembark (leave the company) but is forced to disembark". Subsequently, the media also disclosed an anonymous e-mail, spearheading the succession of the chairman, the representative of the fund shareholders, saying that he deliberately forced the founder shareholders to take over and become a "bad precedent for the investment community." Affected by this, the company's share price continued to drop sharply.

The founding managing partner of Saifune Asia Investment Fund, which has been silent on the media, recently received an exclusive interview with reporters and responded to several doubts in the storm.

Nicknamed that Wu Changjiang's acceptance of the relevant investigations by the relevant Chinese government authorities was very unexpected to him and other board members. Given that Wu Changjiang may be stranded overseas in an unexpected time, he could not perform the company’s chairman and chairman in China. The responsibilities of the president cannot predict the consequences of the investigation. According to the relevant rules of listed companies in Hong Kong, the lawyer suggested that Wu Changjiang should immediately quit all positions. Therefore, Wu Changjiang signed the resignation document overseas on May 25th and proposed to resign from NVC Lighting. The company made an immediate announcement.

On the same day, NVC Lighting's share price fell by more than 20%.

The second announcement of NVC Lighting's unexpected market announcement was released on the afternoon of June 19, saying that “the board of directors of the company has learned that some recent media reports concerning the company’s former chairman and CEO Wu Changjiang’s report involving Chinese government agencies. The board of directors is investigating this rumor." The background to the explanation was that after the stock exchange saw the media report, the Stock Exchange formally sent an official letter to the company asking the company to disclose the disclosure and asked the company and the lawyer to conduct related internal investigations. "According to the Hong Kong Listing Rules, we must disclose and take action on such a big issue," said Yan.

Wu Changjiang’s resignation and disclosure of official information and other information have caused NVC Lighting's share price to drop. On July 9th, the stock's closing price was HK$1.5, which was the opening price of HK$2.16 from May 25. It has fallen by nearly 30% in just over 40 days.

In order to stabilize the company's situation and market volatility, on May 27, NVC issued a share repurchase plan, saying that it can buy back shares (approximately 310 million shares) not exceeding 10% of the total share capital from the Stock Exchange. Up to 388 million Hong Kong dollars. This stock repurchase authorization expired at the end of the annual general meeting held on June 19.

He told reporters that the repurchase plan was announced publicly after the board of directors passed the plan, and the repurchase executed during the period was very few. The repurchase operation in the secondary market was decided by the three independent directors of the company. situation. In response to rumours that privately-informed agencies notified firms to buy shares on a bargain, they alleged that “any connected transaction may involve criminal offenses. I have been a fund for more than 20 years and have never been called (by trading stocks) by any securities company. It's impossible to do this kind of stupid thing to leave yourself handle."

He told the reporter that the board of directors of NVC did not “close the door” to Wu Changjiang and he could come back completely as long as it satisfies three conditions: first, he must explain clearly to the shareholders and the board of directors the matter under investigation; secondly, handle it well. The related transactions that are not allowed under the regulatory rules of all listed companies; the third is to strictly abide by the resolutions of the board of directors.

At the same time, it was explained that at the annual general meeting on June 19, the board of directors of Wu Changyong, the brother of Wu Changjiang, had not passed the proposal because Wu Changjiang did not submit a nomination within the time stipulated by the Hong Kong Stock Exchange. "We agree that his younger brother is on the board. He is a major shareholder and can be nominated."

NVC Lighting's board of directors has a total of nine seats, representing two of its executive directors (Wu Changjiang and Vice President of NVC Lighting Mu Yu). After Wu Changjiang resigns, he can nominate another candidate to replace him; the non-executive director is Saifu The fund's Yukio, Lin Heping (Saifu Partners), Xu Mingyin, the managing director of Goldman Sachs (Asia) direct investment, Zhu Hai, president of Schneider Electric China, and three independent non-executive directors.

He did not make more comments on Wu Changjiang himself. He said, “We don’t want to talk too much about individuals, but we only hope to follow the rules. This is very important. NVC Lighting’s stock price dropped sharply because of Wu Changjiang’s sudden resignation. Shareholders also have a lot of losses, but we did not complain about him but we worked together to stabilize the company."

For another strategic shareholder, Schneider Electric, Jung’s assessment is very positive. He believes that Wu Changjiang’s introduction of Schneider, an international strategic investor, was indeed a win-win move. Schneider has no overlap and competition with NVC Lighting in the business field, and is very helpful to the company's business management and business development. The team leader who led Zhu Hai to take the lead in emergency management also wanted to use Schneider's management experience. At present, the emergency management team has completed its tasks and disbanded, and the company has entered normal operations.

He disclosed to reporters that in fact, before Wu Changjiang was investigated by the official committee, members of the board of directors including Wu Changjiang had reached a consensus and decided that Wu Changjiang only served as chairman of the company, and that the post of president should recruit professional managers to the market. . Zhang Kaipeng, the now-challenged president, is known to the public in this round of CEO recruitment interviews, and he scored the highest among applicants. Prior to joining NVC, Zhang Kaipeng was Schneider’s director of low-voltage terminal operations in China. Nicknamed, Zhang Kaipeng took over as President of NVC, and has nothing to do with Schneider.

Hee said that he is very optimistic about the energy conservation industry. China has about 70% of the global lighting industry. He hopes that NVC Lighting will not only be China's industry first, but also the world's largest. “This industry has potential. If the company does not have normal outside influence, it will be very promising.” Ao said that this is also the reason why SAIF Fund firmly holds shares in NVC Lighting.