By Zhang Xiaohui(张晓晖)
News, cover
Issue No. 556
Feb 13, 2012
Translated by Zhu Na
Original article: [Chinese]

Chongqing Brewery, which produces more than 2 percent of China's beer, has held its first shareholder meeting since disappointing investors with an announcement on the meager achievements of its pharmaceuticals arm.
 
This week's edition of the EO has an account from one person present at that meeting, where shareholders had a chance to set a precedent for Chinese businesses by voting out the chairman, Huang Minggui. In order to get into the meeting, the EO's source had paid 2,638 yuan for 100 shares in the Shanghai-listed brewer.

Chongqing Brewery, which is 30 percent-owned by Carlsberg, had been trying to find a vaccine for the Hepatitis B virus, but a disclosure from the comapany's biotech unit resulted in three quarters of the company's market value being wiped out. It also drew criticism from analysts, many of whom said the firm ought to focus on selling beer to the Chinese, who drank an average of 32 liters in 2010.

The moved to oust Huang was launched by Dacheng Fund, an institutional investor that had lost heavily as Chongqing Brewery’s market capitalization slumped from almost 40 billion yuan in late November 2011 to less than 10 billion yuan in mid-February.
 
The meeting was packed with shareholders as well as journalists who had bought shares in order to get access to the meeting.

Huang was there too, sitting alongside Carlsberg's top representative in China, and the chairman kicked off proceedings with a short, provocative speech.

"I have always fulfilled my duty. I have a clear conscience," he told the disbelieving shareholders.
 
Huang was followed by Liu Ming, the chief investment officer of Dacheng Fund, who spent five minutes explaining how the brewer had failed to respond to "market doubts and the abnormal fluctuations of its stock price" and said that the fund was obliged to seek Ming's dismissal. Liu left immediately after he had finished speaking, without waiting for the vote.
 
Without Carlsberg's backing, the motion had no chance of being passed, and, when the results came in, of the seventy shareholders who attended the meeting, those who supported the motion only held a measly 6.59 million shares, less than 2.5 percent of the total number of shares owned by all shareholders who took part in the vote.

Links and Sources
The Economic Observer: Chongqing Brewery\'s Shady Deal
Reuters: Chongqing Brewery says shareholders vote to keep chairman, hire auditors
Reuters: Carlsberg seeks auditors for China\'s Chongqing Brewery
The Wall Street Journal: Chongqing Brewery Chairman Under Fire
Bloomberg: Chongqing Brewery Co.
Chongqing Commercial News: image

The translation of this story was edited by Thanmayi Rachapudi and Will Bland.