SMIC Shares Fall in Hong Kong After David Wang Quits as CEO
July 18, 2011, 5:03 AM EDTBy Mark Lee
(Adds analyst comment in third paragraph.)
July 18 (Bloomberg) -- Semiconductor Manufacturing International Corp., China’s biggest chipmaker, fell the most in almost two months in Hong Kong trading after David Wang resigned as chief executive officer.
The chipmaker, which resumed trading today after being suspended June 30, fell 9.5 percent to 57 Hong Kong cents as of the 4 p.m. close, the biggest decline since May 20. The stock is up 1.8 percent this year compared with a 5.3 percent drop in Hong Kong’s benchmark Hang Seng Index.
Wang quit SMIC last week after failing to win reappointment as company director at a shareholders meeting last month. The former Applied Materials Inc. executive, who joined SMIC in 2009, clashed with investors including China’s state-owned Datang Telecom Technology & Industry Holdings Co. over strategy, according to analyst Michael Clendenin.
“David is a very forceful guy, and I can’t see him backing down if he thinks he has a strategy that would work,” said Clendenin, managing director at research company RedTech Advisors in Shanghai. Wang had planned to focus SMIC on the production of flash memory chips, a move opposed by Datang, according to Clendenin.
Edith Kwan, a manager at SMIC’s investor relations department, said Wang resigned for “personal reasons,” and declined to comment on the possible disagreement with shareholders or provide Wang’s contact information. Two calls to Datang’s communications department weren’t answered.
Zhang Wenyi, a former Chinese government minister, was appointed acting CEO at SMIC, the company said July 15. In April, China Investment Corp., the country’s sovereign wealth fund, made a $250 million investment in the Shanghai-based chipmaker, joining other state-owned investors including Datang and Shanghai Industrial Investment (Holdings) Co.
Holders of 5.33 billion SMIC shares, or 58 percent of the votes cast at the company’s June 29 annual general meeting, opposed Wang’s reappointment as a director, according to a June 30 regulatory filing. Wang helped SMIC return to profitability last year, after the chipmaker posted five straight annual losses under founder Richard Chang.
SMIC said it will “continue to seek a candidate” for the CEO role. Zhang, a former vice minister at the Ministry of Electronics Industry, was also appointed chairman at SMIC effective July 15.
Former chairman Jiang Shang Zhou died June 27, SMIC said June 29, without disclosing the cause of death.
--Editors: Nicholas Wadhams, Dave McCombs
To contact the reporter on this story: Mark Lee in Hong Kong at wlee37@bloomberg.net
To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net
