Caixin
Oct 31, 2016 06:51 PM
BUSINESS & TECH

Gree Chairwoman Blasts Small Shareholders in Online Video

(Beijing) — The chairwoman of a major appliance maker has bashed her company’s small investors for rejecting part of a 22.7 billion yuan ($3.35 billion) deal that intended to diversify the company’s income streams amid slow sales growth.

“Which listed companies pay investors a cash dividend [as much as Gree’s]? … The more Gree gives you, the more gleeful you become, the more talkative you become,” said a furious Dong Mingzhu, chairwoman of Gree Electric Appliances Inc., during an extraordinary general meeting in Zhuhai, Guangdong province, on Friday.

Small shareholders, who hold a combined 27% of the company’s stock, helped vote down 15 proposals to create an additional fund of 9.7 billion yuan to help cover the expenses of integrating Zhuhai Yinlong New Energy Co. Ltd. into Gree. This would have been in addition to the 13 billion yuan that Gree plans to pay for that company, the appliance maker said in a filing to the Shenzhen stock exchange Monday.

Shareholders approved the proposals to sell 834.9 million new shares at 15.57 yuan each to fund the purchase. But they rejected the 9.7 billion yuan fund, which would have been raised from eight investors through private placement and used for consolidation. The defeat is likely to cast a shadow on post-acquisition integration, market analysts said.

In a video apparently made by someone at the meeting and that was later posted online, Dong, who started at the company in 1990 as a salesperson, excoriated shareholders for not contributing to the growth of the company but merely eyeing gains from stock prices.

“I know you come to this meeting with different goals,” said Dong, known of her bluntness. “Please don’t talk about the stock price with me when you invest in Gree. We should talk about whether this company can develop for 100 years.”

The appliance maker has ventured into other businesses such as smartphones and robotics as sales of air conditioners cool in a saturated market.

When the company announced its plan to purchase Yinlong in March for 13 billion yuan, market analysts said the electric-vehicle maker was overvalued. In response, Dong said in an interview with Caixin in September that she believed the price was reasonable because the lithium-ion power batteries Yinlong produced last longer than other brands, require less time to charge, and they can work in extreme weather.

Gree saw a meager 1.1 year-on-year growth in its revenue in the first three quarters of this year after its revenue plunged 28 percent to 99.8 billion yuan last year, the company’s first annual sales decline on record.

Contact reporter Chen Na (nachen@caixin.com); editor Ken Howe (kennethhowe@caixin.com)

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