That’s why Wong Hok Leung’s departure from Hong Kong-listed China Metal Recycling (Holdings) sent shock waves across the company – and caused a meltdown in its share price. The stock closed at HK$11.30 on November 16, up 118% from its IPO price in June. The next day, when the company announced that Wong had resigned as executive director (and as CFO and deputy CEO), the share price plunged 24% to HK$8.57. The counter has yet to recover as of this writing.

 

Wong has not made any public statements, but speculation is rampant about why he left. Some say it was a clash of cultures. The 56-year-old Wong is a British citizen who is a member of the Association of Certified Chartered Accountants in the U.K. and the Hong Kong Institute of Certified Public Accountants. Before joining China Metal last year, he was group head of financial control at Sun Hung Kai Properties, one of Hong Kong’s bluest of blue chips. He was also chairman of Sun Hung Kai Logistics and held senior posts at two air freight and river trade terminal subsidiaries.

 

China Metal, on the other hand, is a home-grown mainland Chinese enterprise founded in 2000 by Chun Chiwai, 43, and his wife Lai Wunyin, 38. Chun, who is the company’s chairman, CEO and controlling shareholder, “has over 15 years of experience in the business of scrap metal recycling and trading, port operations and shipping,” according to China Metal’s IPO prospectus. He appears to be a hardworking entrepreneur who has mastered the intricacies of doing business in China – but perhaps has yet to learn how to work with executives operating in an international financial centre like Hong Kong.

 

The situation is undoubtedly more complex than this simplistic reading. But only the company’s senior management, board directors and ex-CFO Wong really know what is going on, and they are not saying much. What is known at this point is just a simple outline of what happened, as gleaned from two filings China Metal made to the Hong Kong Exchanges and Clearing on November 17.   

 

In the first statement, China Metal disclosed that Wong had resigned as executive director with effect from November 11. “Mr. Wong stated in his notice that the reasons for his resignation was that the Board had failed to address his concerns or provide clarifications on certain issues (the ‘1st Allegation’) and that he had been denied proper access to the financial information of the Company (the ‘2nd Allegation’),” the filing said. “Mr. Wong also stated that as results of the Allegations, he was no longer able to properly discharge his duties as a director of the Company.”

 

China Metal did not detail exactly what the ‘certain issues’ were that so exercised Wong, and so far Wong himself has not said anything to clarify and detail his reasons for leaving. But the company’s board of directors, said the filing, “considers the Allegations to be wholly unfounded” and believes that “the resignation of Mr. Wong will have no effect on the operations of the Company.”