July 13th, 2012 | Caijing Internal Strife Leads to Labor Strikes in China’s Largest Lightening Equipment Manufacturer
An internal strife in NVC Lightening Holding Limited (2222.HK), China’s largest maker of litening products in terms of sales revenue, has triggered a strike by its employees in factories in Chongqing, Wanzhou and then Huizhou on Friday.
The nationwide strike came following a failure of negation a day before between employees, NVC’s dealers and suppliers, who stand behind Wu Changjiang, former chief executive and founder of the company, and executives from SAIF and Schneider Electric, both of whom are investors of NVC.
Employees had asked to overhaul the board, and specifically, the return of the old boss Wu Changjiang, and the departure of Schneider Electric and SAIF on Thursday, and threatened to strike if these requirements were not met.
Trading of NVC shares has been suspended on Friday morning. The stock has plummeted by more than 40 percent since the abrupt departure of Wu Changjiang on May 25 due to suspected involvement of an investigation.
Rumor has it that Wu was forced to resign due to estrangement with investors, although Wu himself said it was just because he was “tired” and wanted to “have a rest for a while”.
SAIF’s Managing Partner Andrew Yan (Yan Yan) took over as chairman and Zhang Kaipeng from Schneider Electric as chief executive.
In Huizhou, a city of southern China’s Guangdong Province, workers were holding banners and chanting slogans, following strikes in Chongqing and Wan Zhou, reporters from Hexun.com said this morning from the scene.
“Since the entrance of Schneider Electric, shares of NVC have tumbled, leading to a heavy loss of employees who had bought the company’s shares at a price of more than 4 yuan per share,” the report quoted Duan Haiqiong, one of the strikers who organized a “news conference” at the scene, as saying.
Things get even worse as the company’s revenue fell sharply by more than 60 percent in June, Duan added. He contributed to the sharp fall of stocks to the former boss’ departure because “the company had managed to maintain a growth of more than 30 percent even amid the global crisis in 2008 when Wu took office.”
On early morning of Friday, Wu posted on his microblog on Weibo.com, a Chinese twitter-like service, that he left the company in May because Andrew Yan asked him to resign, to “shied away” from public exposure for a while because he was “assisting” in an investigation then.
“People will never know the truth if I continue to keep silent,” he said.
He also rejected requests proposed by Andrew Yan as pre-conditions for his return, including “clarifying the event that he was investigated on”. “[The company] should not allow too many inexperienced laymen into the boardroom,” he said in a harsh tone, clearly referring to Andrew Yan.