The supervisory board of Ultrasonic AG (ETR:US5) ousted Mr. Wu late last week after his disappearance along with most of the company’s cash in China and Hong Kong. The company’s COO Minghong Wu was also missing at the time. According to press reports, Mr. Wu claimed he was on vacation with his grandson and ‘lost his phone’.
Ultrasonic AG failed to contact Mr. Wu
Ultrasonic AG (ETR:US5) stated that a representative of the supervisory board tried to contact Mr. Wu personally in Xiamen. However, the person failed to establish a communication with the dismissed CEO.
“A more detailed evaluation of the call was not possible for the management and the supervisory board considering the shortness of time. Regarding the current situation, the disclosure of this information nevertheless deemed to be necessary as any news could be of relevance for shareholders,” according to Ultrasonic AG (ETR:US5).
The management and supervisory board expressed their commitment to providing updates regarding any development regarding the issue, and to clarify the latest information about Mr. Wu’s intention to return the company’s funds.
CFO agreed to withdraw his resignation
Last week, Mr. Chan agreed to withdraw his decision to step down from his position as CFO of the company to help resolve its current problem. His departure was scheduled by the end of the month.
According to Ultrasonic AG (ETR:US5), Yeung Man Kin, the appointed successor of Mr. Chan cancelled his contract amid the situation. He was supposed to take over as CFO on October 1st.
Ultrasonic AG trying to prevent insolvency proceedings
Meanwhile, the company’s supervisory board is negotiating with its creditors to prevent insolvency proceedings. Last August, Ultrasonic AG (ETR:US5) secured a $60 million credit facility from Nomura International (Hong Kong) Ltd to finance its expansion.
However, the current problem confronting Ultrasonic AG (ETR:US5) prompted its creditor to exercise a certain clause under the credit facility agreement. The $60 million credit facility and interest of $180,236.89 became due and payable immediately as of September 17, 2014.
The company is currently consulting with its legal advisors to evaluate the exact legal implications of the claim.
As we noted last time, mark your calendars, as this will likely make a great case study one day.