Chinese insurer's board battle could backfire

Vanke Overseas Investment Holding

23/11/2016 03:33

(The author is a Reuters Breakingviews columnist. The opinions 
expressed are her own.) 
    By Kathy Gao 
    Nov 23 (Reuters) - The mass resignation of CSG's management 
team after a hostile takeover by activist conglomerate Baoneng 
Group puts the profitable firm's fate in limbo. If Baoneng wants 
to prove itself as a strategic investor, it should look before 
leaping into boardroom battles.  
          
    Full view will be published shortly. 
    On Twitter https://twitter.com/kathy_gao 
     
  CONTEXT NEWS 
     - Baoneng Group, a financial conglomerate led by China's 
fourth-richest man, became CSG's largest shareholder in CSG 
Holding in a hostile takeover last year. Three Baoneng employees 
were elected to the Shenzhen-listed glass manufacturer's board 
of directors earlier this year, according to Chinese media 
reports.  
    - CSG's chairman, chief executive, chief financial officer, 
and four vice presidents all resigned on Nov. 15, followed by 
the resignation of the secretary of the board and two 
independent directors the next day, according to stock filings. 
    - The board then elected Chen Lin as chairman and chief 
executive on Nov. 19, CSG said in a filing. Chen Lin is 
identified as senior vice president of Baoneng Group on 
Baoneng's website. 
    - CSG's share price jumped up as much as 25 percent in the 
four days following the top management team's resignation to 
trade at over 15.3 yuan ($2.22) per share, near a twelve-month 
high. The price has come down since.  
    -  For previous columns by the author, Reuters customers can 
click on  GAO/  
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    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ 
China's CSG Holding climbs to near 12-mth high amid top 
management reshuffle      urn:newsml:reuters.com:*:nL4N1DJ1B8 
Baoneng lifts stake in China Vanke, fuels speculation of hostile 
bid      urn:newsml:reuters.com:*:nL4N19S15A 
CSG announcement (in Chinese)    http://www.cninfo.com.cn/cninfo-new/disclosure/szse_main/bulletin_detail/true/1202836782?announceTime=2016-11-21 
BREAKINGVIEWS - China insurers' worst habits go almost unchecked 
     urn:newsml:reuters.com:*:nL4N1AC1SX 
BREAKINGVIEWS - Vanke battle is test of China's shareholder 
rules     urn:newsml:reuters.com:*:nL4N19T1PM 
BREAKINGVIEWS - Vanke's white knight leaves shareholders in a 
bind     urn:newsml:reuters.com:*:nL4N19C1UZ 
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> 
 (Editing by Pete Sweeney and Katrina Hamlin) 
 ((kathy.gao@thomsonreuters.com; Reuters Messaging: 
kathy.gao.thomsonreuters.com@reuters.net)) 
 
Keywords: CSG HLDG BAONENG/BREAKINGVIEWS