The chairman of Kaisa Group Holdings, Kwok Ying-shing, resigned from his posts with the China real estate developer after government actions and questions about the company’s viability caused its shares to slide more than 34 percent in the last few weeks.
According to an announcement to the Hong Kong Stock Exchange on Friday, Kwok has resigned his positions as executive director, chairman of the Board, chairman of the Nomination Committee, member of the Remuneration Committee and legal representative of Kaisa, effective 31 December.
The moves came soon after the Shenzhen government froze sales of three of the company’s real estate projects. Kwok had earlier been rumoured to have been detained by the authorities, and Kaisa had also been linked to fallen former Politburo member Zhou Yongkang.
Kwok Bows Out for “Health Reasons” as Board Reshuffled
According to Kaisa, Kwok Ying-shing has left his positions for health reasons and Ye Lieli, president of Shenzhen insurer Sino Life was appointed an executive director and co-chairman of the company. The other co-chairman will be Kaisa veteran board director Sun Yuenan, who previously served as an executive with developer SPG Land.
Just one week previous, Sino Life had raised its stake in Kaisa to 29.96 percent through a private purchase of shares in the Hong Kong-listed real estate firm from the Kwok family trust. Through that transaction, the Kwok family sold 11.21 percent of Kaisa’s shares to Sino Life for HK$1.7 billion ($219 million), to reduce its holding in the company to 49 percent.
As part of the board reshuffle, Kwok Ying-shing’s brother, Kwok Ying-chi was also redesignated as a non-executive member of the company’s board, after previously serving as vice chairman. Kwok Ying-shing appears to be leaving Kaisa’s board entirely.
Kaisa shares closed on Friday at HK$2.05 per share, down from a HK$3.11 per share on November 24th.
Big Trouble in Southern China
The distress at Kaisa comes after several Shenzhen officials have stepped down amid China’s anti-corruption campaign and following reports linking the developer to the son of Zhou Yongkang.
Since October Kaisa has been denying reports that Kwok had been detained by investigators, and reports in official media earlier this year highlighted partnerships between Zhou’s son, Zhou Bin and the son’s mother-in-law, Zhan Minli, with Kaisa.