BaWang couple woes spill out

Top News | Tracy Hu 28 Dec 2017

BaWang International slumped 30 percent yesterday before trading was suspended at 10.36am, one day after the chairman's wife said she is seeking a liquidation of the firm's controlling shareholder.

At an afternoon media briefing, Wan Yuhua, co-founder and former chief executive of the herbal shampoo maker, said BaWang shares were "illegally allocated" so that her stake was reduced from 49 percent to 24.71 percent without her permission.

Since earlier this year, Wan and her husband Chen Qiyuan, co-founder and chairman of BaWang, have been reported living apart. Wan told reporters they have been estranged for two years.

She added she has been "ill-treated" by Chen, who only regarded her as a "breeding machine." She added Chen filed for divorce in September.

Wan also said she was ousted from the board of directors after someone forged her signature on a resignation letter, which was later passed at a meeting.

On Tuesday, Wan said she decided to file a High Court action for liquidation of Fortune Station Ltd, which holds 60.12 percent of the equity interest of BaWang. Wan added she agonized over making such a decision, and was sorry to cause a slump in the share price.

BaWang's interim report for 2017 showed the equity interest of Fortune Station is 49.57 percent owned by Heroic Hour Ltd, co-owned by her seven children, while 25.72 percent is held by Chen, and 24.71 percent by Wan.

After Wan's media briefing, Chen responded with a statement, saying BaWang is now functioning normally, and he felt strange about Wan's claims.

Chen said what Wan has alleged is not factual, and he will take legal action to defend his and the group's reputations.

Chen also stressed the debts of Wan's own business in the mainland has nothing to do with BaWang, Heroic Hour, or Fortune Station.

In the past several years, the herbal shampoo maker's sales have seen a downward trend after a 2010 incident which led to a slump of up to 20 percent in its share price.

In May last year, Next magazine, which published an article claiming that BaWang shampoos contained a cancer-causing ingredient, was fined HK$3 million by the High Court for defamation.

The share price of BaWang was at 20 HK cents when the trading was halted yesterday, compared to 29 HK cents at the close of the previous day.

An announcement that will elaborate on the reason for the suspension is pending, according to a stock exchange filing.

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