Huishan Dairy says board cannot act on company’s behalf after new resignations

The resignation of two more executive directors at Huishan Dairy, the company whose share price plunged 90 per cent last month in Hong Kong, has left its board of directors short of the number required to act on the troubled dairy group’s behalf.

A late-night stock exchange filing from the company on Tuesday reveals that Kwok Hok Yin resigned as executive director with effect from April 18, “as he would like to focus on the Group’s business-to-business segment” – though he “remains in employment with the group as vice president” responsible for its dairy ingredient business.

Director So Wing Hoi had also resigned as executive director as of April 17, “for health reasons as he is still recovering from a recent scheduled heart surgery.”

Those resignations leave only two members of Huishan Dairy’s board of directors: Yang Kai, its chairman, and his business partner Ge Kun, who the filing notes is still incommunicado. In late March the company revealed it had received a letter from Ms Ge, the head of its treasury operations, “indicating that the recent work stress had taken a toll on her health, that she would take leave of absence and does not want to be contacted at this time”.

The latest resignations also put the total board members below the three required in the company’s own articles of association, meaning the board “ceases to be able to act for and on behalf of the company” until it can appoint new directors, according to the filing.

That also looks unlikely, with the company noting that while Mr Yang is actively seeking to fill vacancies on the board, “given recent events, he may not be able to find suitable candidates soon.”