China Aircraft CEO Resigns During Vacation, Can’t Be Contacted

China Aircraft Leasing Group Holdings Ltd., Asia's only listed lessor, said Chief Executive Officer Poon Ho Man resigned during his vacation and the company has since been unable to contact him. The stock plunged a record 19 percent.

Poon went on annual leave from May 18 to June 26 and on June 17, the company received his letter saying he would resign with immediate effect, the aircraft lessor said in a statement to the Hong Kong stock exchange Friday. The board has since tried to contact Poon and hasn't been successful, it said.

China and Hong Kong media have reported Poon might be under investigation by the Chinese government relating to its customer China Southern Airlines Co., the lessor said. Poon's resignation comes amid an anti-corruption crusade by President Xi Jinping. The Communist Party warned in December that political cliques and their corrupt business ties wouldn't be tolerated.

"No one and no industry can be exempt from disciplinary scrutiny in today's China," said Hu Xingdou, an economics professor at the Beijing Institute of Technology. "If someone from a senior position vanishes, the first reaction from the public would be that that person might be probed even if no official allegation has been made."

The lessor isn't the only company in China whose top executives had gone missing. In January, Founder Securities Co. said that its hasn't been able to reach Chairman Lei Jie since Jan. 19 after he took sick leave on Jan 12. It also lost contact with its supervisor Yang Kesen since June 9.

Shares Plunge

Shares of China Aircraft, which were halted from trading yesterday, slumped 19 percent to HK$9.65 in Hong Kong at the close of trading Friday. It's the biggest drop for the stock since a July 2014 listing.

Neither the company nor its directors have been contacted by the government in relation to the investigation reported in the media, the aircraft lessor said. China Aircraft said it's unable to verify the source of information of the news that appeared in local media.

A call to the company's main line, asking to be connected to the CEO's office, wasn't successful.

Last year, the Hong Kong-based company became the first Asian aircraft lessor to list in the market after selling HK$728.9 million ($94 million) in an initial public offering. The company also pledged to buy 100 Airbus Group SE airliners valued at $10.2 billion.

Documents Review

China Aircraft has reviewed its documents and records with China Southern and found no irregularities, it said in the stock exchange statement. China Southern didn't immediately reply to an e-mail seeking comment.

Following Poon's resignation, the board appointed Chairman Chen Shuang as the CEO, in addition to his current position, effective Thursday, the company said. China Aircraft also said Chief Financial Officer Yu Tai Tei also resigned and has been replaced by Mok Chung Tat.

"The company further confirms that it has sufficient internal control system in place," China Aircraft said. "Each aircraft lease transaction has to be approved by the strategy committee, taking into account the terms of the transaction, the return and risk."

China Everbright Ltd. and Friedmann Pacific Asset Management Ltd., the controlling shareholders of China Aircraft, don't plan to reduce their holdings and will continue to support the company, according to the statement. China Everbright and Friedmann own a combined 65.6 percent of China Aircraft, according to data compiled by Bloomberg.

Calls to Friedmann's Hong Kong office went unanswered.

China Everbright said it doesn't have any plan to reduce the shareholding, the company said in an e-mailed response.

Source: China Aircraft CEO Resigns During Vacation, Can't Be Contacted