Tuesday, July 5, 2011

SMIC's Takeover

As I predicted last February (link here), the Chinese state's control of SMIC's board has finally had some adverse consequences for the firm.  The widely reported failure of CEO David N. K. Wang to get re-elected to the board is due to Datang's long-standing bid to turn SMIC into its subsidiary according to local media reports.  The fact that the other state board members abstained from voting thus ensuring Wang went down in defeat is not reassuring.  More disturbing still, in the wake of Wang's defeat Walden's Lip-Bu Tan and the other real independent director, Kawanishi, have resigned.  Given that Wang was in charge when the firm turned its first annual profit, apparently no good deed goes unpunished.