Liang Xinjun, co-founder and chief executive of Shanghai-based Chinese conglomerate Fosun Group (00656.HK) has resigned for health reasons.
In fact, rumors that Liang might leave Fosun for health reasons has been circulating among Shanghai’s business elites since late last year.
It’s said many analysts and fund managers have made inquiries with Fosun’s investor relations department but they have failed to get any formal reply.
The rumor was finally confirmed by an exchange filing by Fosun late Tuesday evening.
Fosun was founded by five alumni of Fudan University — Guo Guangchang, Liang Xinjun, Wang Qunbin, Fan Wei and Tan Jian — 25 years ago.
The company was initially called “Guangxin Technology”, a combination of the Chinese names of Guo and Liang. But the name was changed to Fosun, meaning the star of Fudan, the following year.
Fosun made its first million yuan through the provision of market intelligence services. Over the years, it gradually diversified into steel, property, insurance and the internet and turned itself into a multinational conglomerate today.
By the end of last year, Fosun had total assets of 486.8 billion yuan (US$70.68 billion) and net assets of 122.9 billion yuan.
As China’s largest conglomerate from the private sector, it is often dubbed as Shanghai’s Hutchison Whampoa or China’s Berkshire Hathaway.
Following the departure of Liang, only two founding members remain in the top management — Guo and Wang.
On the surface, Liang’s reason for leaving Fosun looks genuine. He also described his departure as “taking a break”, indicating he is still on good terms with other top management members.
That said, Liang and Guo, Fosun’s chairman, may indeed be drifting apart, judging from a posting by Guo on social media.
In a WeChat posting, Guo said he might not have taken into consideration the limitations of other team members and has continued to push the limit.
“But in the business world, if we do not keep moving forward, we may soon fall behind. Liang and I both understand that very well,” Guo wrote.
Perhaps Guo is implying Liang has reached his limit and may not be able to keep up with the team.
Guo admitted the absence of Liang, the No. 2 in Fosun, will have some negative impact in the short run but investors should not read too much into that.
After all, it is quite natural for founding members to leave a firm. Up to a certain point, there will be a difference in their life goals.
This article appeared in the Hong Kong Economic Journal on March 30
Translation by Julie Zhu
[Chinese version 中文版]
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