H.K. suspends Brilliance China shares

Staff and wires

HONG KONG, China -- Shares of China's largest minibus maker Brilliance China Automotive Holdings were suspended from trading in Hong Kong Friday.

The shares last traded Thursday at HK$1.095, down 2.65 percent on the day and the lowest price since the stock touched HK$1.08 on September 24 last year.

The Hong Kong stock exchange is seeking clarification of recent newspapers reports about the removal of the company's chairman and CEO, according to one analyst.

"The stock exchange is asking them to clarify all this newspaper speculation," Morgan Stanley analyst Jerry Lou told Reuters news agency.

Lou spoke to Brilliance's newly appointed chairman Wu Xiaoan immediately after the suspension.

The company said Thursday that its chairman, chief executive officer and president Yang Rong had been replaced by vice chairman Wu Xiaoan.

No comment

The stock exchange said trading in the stock had been suspended but gave no further information. Brilliance officials were not immediately available for comment.

Several newspapers have reported Yang has been under investigation by Chinese authorities, which the company had repeatedly denied.

"I think things are coming to a pause with Yang stepping down," Lou told Reuters.

On Wednesday analysts said they were told a joint venture between Brilliance and Germany's BMW had been given the official go-ahead, and production would likely start in the last quarter of 2003.

Analysts who joined a company briefing also quoted Brilliance as saying the board had removed Yang, one of the richest men in China, because his goals and views were no longer in line with those of shareholders.

The company did not elaborate.

Share price falling

Under the reshuffle, directors Su Qiang, Hong Xing and He Tao have been promoted to president and chief executive officer, vice chairman and chief financial officer, respectively.

Brilliance stock has lost more than 17 percent in the last month on concern over the media reports about Yang, uncertainty over the status of the BMW joint venture and fierce competition in China's automobile market.

Brilliance tried to assuage fears about the firm's stalled joint venture with German luxury car maker BMW by telling analysts that the company was expecting approval from China's State Council "very soon." The companies have been awaiting final approval for well over a year.

A BMW spokesman in Germany said the change in management at Brilliance would not affect the joint venture plan.