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UPDATE 2-China Rongsheng chairman steps down, CEO takes over
November 26, 2012 / 9:55 AM / 5 years ago

UPDATE 2-China Rongsheng chairman steps down, CEO takes over

HONG KONG, Nov 26 (Reuters) - China Rongsheng Heavy Industries Group, the country’s largest private shipbuilder, said its chairman had stepped down just three months after the company posted its sharpest fall in half-year net profit.

Zhang Zhirong quit to devote more time to his personal interests and will be replaced by the company’s chief executive officer, Chen Qiang, effective immediately, the company said on Monday in a statement to the Hong Kong stock exchange.

Listed in November 2010, Rongsheng was hit by an insider dealing scandal involving a firm owned by Zhang ahead of the $15.1 billion bid for Canadian oil firm Nexen Inc by China offshore oil and gas producer CNOOC.

Rongsheng said earlier this month that investment firm Well Advantage, controlled by Zhang, had agreed to pay $14 million as part of a settlement deal with the U.S. Securities and Exchange Commission (SEC).

It added that Zhang was not named as a defendant and Well Advantage had not admitted the allegations.

The SEC had filed a complaint in a U.S. court in July against the company controlled by Zhang and other traders, accusing them of making more than $13 million from insider trading ahead of the bid.

In August, Rongsheng posted an 82 percent drop in half-year profit on a dearth of new orders and warned economic uncertainties would continue to weigh on the global shipping market.

Shares of Rongsheng, which has a market value of $1.4 billion, have fallen 30 percent so far this year.

Zhang Zhirong has also resigned as chairman of Glorious Property Holdings Ltd, the property developer said, as part of a series of executive changes at the company.

As part of the changes at China Rongsheng, the company said that Zhang De Huang was retiring and had resigned as an executive director and as vice chairman of the board.

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