Li Ning CFO resigns

Learn why Barclays Capital finds the resignation negative.

Li Ning issued an announcement and hosted a conference call regarding Mr Nicholas Chong’s resignation as the company’s CFO and executive director, with effect from 1 Nov 2012.

Below are the key messages from management:

§ Mr Chong resigned due to personal aspirations for other career development and has no disagreement with the company’s board. He agrees to serve as the company’s adviser in the next few months while the company is in talks with potential candidates to fill the role of new CFO. According to the announcement, Ms Lee Hung has resigned as the company secretary, with effect from 15 Oct 2012. Ms Lisa Yim has been appointed as the new company secretary, with effect from 15 Oct 2012.

§ An Interim Head of Finance has been appointed for handover of duties: Management confirmed that it has appointed an industry veteran who has 20 years of finance operations experience to serve as Interim Head of Finance during the transitional period. As this person has been working with Nicholas, management is confident of a smooth handover of duties. Meanwhile, it is clear that this candidate of Interim Head of Finance will not step up as the company’s next CFO, as per the candidate’s will. Management emphasized plans to hire a high calibre candidate and a “right fit” to accelerate the company to the next level.

§ Brief business update: Management limited the conference call to focus on the resignation of the CFO and company secretary, so not much business update was provided. Nevertheless, management did mention that inventory clearance and channel streamlining remained the company’s top priorities and their execution was on track. A consultant team was hired to look after the company’s channel, inventory and cash flow management, supplementing the management team’s capability.

Barclays commented: "We view this announcement as negative to the company’s share price, as the CFO's resignation came at a critical time for the company’s transitional period,"