Two nonexecutive directors at Fantasia Holdings Group Co. 1777 1.82% have resigned, days after the Chinese developer rattled investors by unexpectedly failing to repay $206 million in maturing dollar bonds.
The resignations of Ho Man, who had chaired the audit committee, and Priscilla Wong took effect immediately, Fantasia said late Monday in Hong Kong. “Mr. Ho has expressed concern that he had not been kept fully informed of certain crucial matters of the company in a timely manner,” it said.
Fantasia’s Oct. 4 default, together with poor sales figures from Chinese developers, stoked concerns that the sector’s difficulties extended far beyond the ailing China Evergrande Group. Property bonds sold off steeply last week, and as of Monday a real-estate-heavy ICE BofA index of Chinese junk bonds was yielding about 20.7%.
The Hong Kong-listed company said it was searching for new directors to replace Ms. Wong and Mr. Ho.
Local stock-exchange rules require companies to have a minimum of three independent directors, and for these directors to represent at least a third of the total board. At least one should have accounting qualifications or relevant expertise in accounting or financial management. Only one of Fantasia’s seven current directors is independent, and doesn’t possess the requisite experience, the company said.
Shenzhen-headquartered Fantasia has said it is working with the support of local governments and others to resolve its problems. It has hired a unit of U.S. restructuring specialist Houlihan Lokey Inc. and the law firm Sidley Austin for advice.
Fantasia’s stock has been suspended since Sept. 29. Its dollar bonds due March 2024 were quoted at 19.5 cents on the dollar Monday, according to Refinitiv, down from 49.1 cents a month earlier.
The high-end developer is majority owned by Zeng Jie, also known as Baby Zeng, a niece of former Chinese Vice President Zeng Qinghong. As of end-June, it had 47 projects under construction in cities across China, including Beijing, Wuhan, Tianjin and Ningbo, according to its interim report.
Write to Anniek Bao at [email protected]
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