SAN FRANCISCO—Shares of Chinese chip foundry Semiconductor Manufacturing International Corp. (SMIC) ceased trading at the company's request Thursday (June 30) after SMIC reported that its chairman died and that the company's president and CEO failed to win re-election to its board of directors.
SMIC (Shanghai) said Jiang Shang Zhou, non-executive chairman of the company's board, passed away on June 27.
SMIC shareholders failed to re-elect David N.K. Wang, the company's president and CEO, in a vote at the company's annual general meeting Wednesday, SMIC said. Wang received the votes of less than 42 percent of SMIC's outstanding shares, fewer than the 50 percent needed to win reelection, SMIC said.
SMIC said it was considering the implications of Wang's failure to win relection and would make further announcements concerning any material developments. Wang is well known in the semiconductor industry for his long years of service at Applied Materials Inc.
With Zhou's passing, the company's two remaining non-executive directors, Tsuyoshi Kawanishi and Lip-Bu Tan, will be joined by a third non-executive director, Zhang Wenyi, who was appointed to the board June 20, effective June 30.
Zhou's death also leaves vacant a position on SMIC's audit committee. In accordance with the rules of the the Stock Exchange of Hong Kong Ltd., SMIC said it would appoint a new third member to its audit committee as soon as possible.
Zhou, who reportedly died of cancer at age 64, had been a director of SMIC since 2006 and was also chairman of the China Semiconductor Industry Association. He spent much of his life as a government official.
Other measures that would have given SMIC's board the power to issue, distribute and repurchase shares of the company were also defeated by shareholders at the company's annual meeting, SMIC said.
In February, SMIC reported a profit of $68.7 million for 2010, the first year it has posted a profit since it become a publicly traded company.
Last year I had a conversation with an employee from SMIC, who forecasted the crisis since there have been virtually a hundred managers left that company in last 6 months.
The social system underwent in that country can be seen and I have no comment to it at the moment. Let me answer your question in this way.
In chinese language, the given name of the chairman, Shang Zhou, stands for the motion of being on a shallow boat (something like Gondola) in rush river, which precisely describes the difficulty to get onto that seat.
Typical in-fight associated with the major shareholder's design to bring SMIC in under its total control, it sure does not serve well in the eyes of its customers should SMIC to change its core business model of pure foundry player... So God helps it
I am left wondering if the government is a major shareholder in this company? It seems that these votes are not in the best interests of (most of) the shareholders. There is more here than meets the eye.
This does not sound good.
No succession plan? No vote of confidence in the company's CEO?
We'd all have to wonder something else must be going on here...
That said, familiar names like Tsuyoshi Kawanishi or Lip-Bu Tan give us some comfort.
For those who do business with SMIC, what are you hearing?
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