Cause for worry: Yangzijiang shares slide by 11%

It’s a double whammy for the shipbuilding giant.

Yangzijiang shares fell a whopping 11% today. This is a sharp blow to the already beleaguered company, after headlines erupted last week that its Chairman and CEO Ren Yuanlin is under investigation for allegations of misconduct. 

Ren was reported to Chinese authorities on May 26 over several illegal activities, including insider trading, misrepresentation, infringement of the independent operation of a listed company, illegal access to shares of a listed company, manipulation of stock price and interference in the truthful disclosure of regular reporting by China-listed Tianjin Guoheng Railway Holding (Guoheng).

Ren has denied all allegations, and has reassured shareholders that the accusations are unfounded. 

A report by DBS Research Group noted that the knee-jerk reaction seems overdone as no charges have been presented against Yangzijiang or its subsidiaries, and the businesses of the Group continue to run its ordinary course.

“While sentiment may be hit, it is premature to jump to any conclusions especially with Mr Ren dismissing these allegations. The allegations were against Mr Ren and have no impact on Yangzijiang’s operations and financials,” stated the report.