Chinese refrigerator maker Guangdong Kelon Electrical Holdings Co. said it has fired chairman Gu Chujun, whom securities regulators suspect has overstated the company’s profit since 2002.
Kelon’s board voted unanimously to remove Gu at a meeting over the weekend, the company said in a statement on the Hong Kong stock exchange’s Web site Tuesday. Vice Chairman Liu Congmeng will assume Gu’s duties, the statement said.
Gu and four other Kelon executives have been detained by Chinese authorities on suspicion of committing economic crimes.
Gu is also accused of misusing up to 800 million Chinese yuan, or $98.8 million, of Kelon’s funds to buy three other Chinese companies, according to Chinese state media.
Kelon also said the investigation of its executives forced it to delay its first-half earnings announcement from next Monday to Aug. 31. The company said last month it expects to post a huge loss in the half.
Kelon’s board voted to appoint an outside company to assess the impact of the alleged offenses by Gu and fellow executives, the statement said.
It said three independent non-executive directors who quit the board over Gu’s actions have rejoined.
Kelon is listed in Hong Kong and Shenzhen. Trading of Kelon shares in Hong Kong has been suspended since June 16 pending the release of price sensitive information.
Gu, an engineer, became wealthy after inventing chlorofluorocarbon-free refrigerants that are less environmentally harmful than traditional refrigerants that are blamed for contributing to global warming.
Gu’s flagship company, Guangdong Greencool Enterprise Development Co., holds a controlling 26.4 percent stake in Kelon.
Kelon’s troubles became apparent when it reported a loss of more than 60 million yuan in the fourth quarter of 2004 after reporting a total profit of 200 million yuan in the first three quarters.
From The Washington Post