Yangzijiang Shipbuilding Holdings Ltd chairman Ren Yuanlin has stepped away from his duties to devote time to an official investigation in China.
His son, Ren Letian, is taking his director's place for the time being.
The board of the Singapore-listed company, China's biggest non-state-owned shipbuilder, announced the development Wednesday in response to queries from the Singapore Stock Exchange following last week's dramatic fall in the company's share price.
TradeWinds reported on 2 August that a retired local Communist Party of China official, Liu Jianguo, 65, was under investigation by an internal party body and “suspected of serious violations of the law”, according to an announcement by Beijing’s Central Commission for Discipline Inspection (CCDI), the organ of the Communist Party of China that investigates infringements by party members.
Liu, closely associated with the development of the shipbuilding industry in the region where Yangzijiang is located, had also served as chairman of management committee of the elder Ren's private Jiangsu Yuanlin Charity Foundation, with decision-making authority over its funds. It is unclear how long he remained in that role.
On 8 August, Yangzijiang's stock crashed by 28% in two hours, leading to a trading halt and the exchange query.
"Mr Ren Yuanlin, the executive chairman and controlling shareholder of the company is currently assisting in a confidential investigation carried out by certain [People's Republic of China] governmental authorities," the board said in a stock exchange filing containing Yangzijiang's response to the stock exchange queries. "Beginning 9 August 2019, Mr Ren Yuanlin has been granted a leave of absence by the board to focus on the investigation."
No other Yangzijiang directors or executives have been asked to assist with the investigation, and neither the elder Ren nor they are subjects of the investigation, according to the announcement.
"[The] businesses and operations of the group are unaffected by the investigation and [the] leave of absence," the company added.
The board underscored that the elder Ren "continued to have a decision-making role" until the day before his leave in major company matters, including approving Yangzijiang's recently released second-quarter results.
"The intention of the leave of absence is to expedite the completion of the investigation so that he may resume his full-time duties with the group as soon as possible," the company told investors.
