Liu Minxia

    mllmx@msn.com

    ANOTHER unit of Ping An Insurance has created a stir among stock investors after ousting a respected chief executive of a Shanghai cosmetics manufacturer, which it bought in 2011, amid a financial and power-related dispute.

    Ping An Trust Co., Shanghai Jahwa’s largest shareholder, accused Ge Wenyao, Jahwa’s chairman and chief executive, of pocketing illicit gains. Ge refuted Ping An, saying he had only wanted to sell Jahwa for short-term profits.

    No matter how the power tussle ends, both sides will suffer losses, analysts say, as the incident has aroused doubts among investors about the corporate governance of both firms.

    Jahwa’s Shanghai-listed shares dropped by the daily limit of 10 percent to 62.99 yuan (US$10.25) after trading resumed yesterday. The shares were suspended from trading Tuesday after tumbling 5.3 percent Monday.

    Jahwa said in a statement yesterday that Ge was no longer chairman or chief executive of the group but remained chairman of the listed firm. Ge’s removal from the posts is subject to approval at a pending shareholders’ meeting.

    Ping An Trust, the trust arm of China’s second-largest insurer, has installed its vice general manager, Zhang Liqing, as the new chairman.

    The battle for actual control of the time-honored Chinese cosmetics firm started not long after Ping An Trust bought out State-owned Shanghai Jahwa Group for 5.1 billion yuan in late 2011.

    It escalated when Ge was fired Saturday on charges that he and other senior managers had pocketed the company’s off-the-book gains. Denying any wrongdoing, Ge wrote on his Sina Weibo microblog Monday and Tuesday that he blamed Ping An Trust for not helping Jahwa improve its businesses as expected and was trying to sell its assets for short-term gains.

    “This is a battle of no winners, although Ge is known as an intelligent business leader and Ping An Trust was believed to be able to help Jahwa’s expansion at home and abroad,” said Chinapex Capital partner Ye Feng.