Title: Chairman of Brilliance China Detained for Investigation, Stock Price Falls
Subtitle: Wu Xiaoan’s Detention Raises Concerns among Investors
Date: August 9, 2023
Hong Kong – In a shocking development, Wu Xiaoan, the executive director and chairman of the board of directors of Brilliance China, was recently detained and investigated by the Hong Kong Independent Commission Against Corruption (ICAC). The news of Wu’s detention had an immediate impact on the company’s stock price, which fell after the resumption of trading.
According to an announcement made by Brilliance China on August 8, ICAC officers executed a search warrant at the company’s main business location in Hong Kong on August 3. Wu Xiaoan was subsequently detained for suspected violation of Article 9(1)(a) of the Prevention of Bribery Ordinance under the Hong Kong Laws. However, he was released on bail on August 4 without being formally charged.
Despite Wu’s detention, Brilliance China stated that the investigation by ICAC has not had a material adverse impact on the group, and the business and operations of the company remain normal. The company also mentioned that it would seek legal advice on the ICAC investigation in due course.
After a temporary suspension on August 3, trading in Brilliance China stock officially resumed at 1 pm on August 8. However, the stock price experienced a significant decline during intraday trading, falling by more than 8%. Ultimately, the stock closed down 3.81% to 3.79 Hong Kong dollars per share. On the following day, the share price remained flat.
Wu Xiaoan, 61, has been a prominent figure in the Brilliance Department for over two decades. He has held various positions within the department’s affiliated companies, including Brilliance Renault, BMW Brilliance, Brilliance East Asia Auto Finance, and BMW Auto Finance (China) Co., Ltd. Wu also serves as the chairman of Xinchen Power, Jinbei Auto Control, and a director of Brilliance Investment Holdings Limited.
The news of Wu Xiaoan’s detention comes at a significant time for Brilliance China, as the company’s long-awaited restructuring plan was recently approved. On August 2, one day before the investigation, the Shenyang Intermediate People’s Court ruled in favor of Brilliance Group’s substantial merger and reorganization plan, effectively ending the reorganization of 12 enterprises, including Brilliance Group. The approved plan transfers the controlling shareholder position to Shenyang Automobile Co., Ltd. and the State-owned Assets Supervision and Administration Commission of the Shenyang Municipal People’s Government.
Brilliance Group, a key state-owned enterprise affiliated with the State-owned Assets Supervision and Administration Commission of Liaoning Province, owns several listed companies, including Brilliance China, Jinbei Auto, and Shenhua Holdings. The restructuring plan’s approval signifies a new beginning for the Brilliance Department, following the debt crisis and subsequent reorganization efforts.
Investors remain cautious about the impact of Wu’s investigation on Brilliance China’s future prospects. As the company navigates through this challenging period, industry experts and stakeholders await further developments in the ICAC investigation and the potential implications for the auto manufacturing giant.
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Disclaimer: This article is based on the mentioned sources and does not reflect the opinions of the AI.