The chaos shaking China's largest Internet portal Sina.com intensified on Monday as its former chief executive officer (CEO) Wang Zhidong labeled the announcement of his resignation as "illegitimate'' and threatened legal action.
However, an announcement by Sina.com board of directors from California, which was released after Wang's claim, said the board sticks to its earlier decision to remove Wang as the portal's CEO, president and a member of the board.
Wang, who was said to have resigned from his posts as president, CEO and board director on June 1, broke his silence yesterday, three weeks after leaving the company.
In a written statement, Wang said he doubted the legitimacy of the decision by board members to force him to leave.
He said he had hired lawyers to help him fight his dismissal.
"My first feeling after getting the news of the so-called resignation was that I was betrayed, not by any specific person but by some force,'' Wang said.
"The board of directors has the right to fire the CEO of a company, but there are some loopholes in the procedures and legitimacy of the decision made by Sina.com's board,'' he said.
"Any contract conflicting with related laws will not be effective,'' he said.
A lawyer from the Shanghai office of the US-based O'Melveny & Myers LLP accompanied Wang at a press conference yesterday.
Wang holds shares in the Beijing-based Sina Internet Information Service Co Ltd (SIISC), which is a solely Chinese-funded business and has an Internet content provider license.
Present Chinese law forbids foreign capital from the telecommunications sectors, so the NASDAQ-listed Sina.com actually has to rely on SIISC to operate in China.
Sina.com can only provide technical support to SIISC which is directly providing Internet services to Chinese customers.
Wang said he was still president of SIISC and had held 70 percent of the shares in the business.
"The change in the management of Sina.com will not have any impact on the independence of SIISC,'' he said.
Wang returned to his office in Sina.com's Beijing headquarters yesterday for "some preliminary communications'' with Sina.com's new board.
Yesterday's developments indicate the conflict between Sina.com and Wang have intensified.
"The disputes have been made public and it will deal a big blow to the stock prices of Sina.com on the NASDAQ,'' said one IT analyst.
"Even if both parties reach an agreement later, Sina.com will not easily recover from the negative effects of the incident,'' he added.
In media reports, Wang has been portrayed as a hero fighting against capitalists who do not understand the Chinese Internet industry. Some Internet users have threatened to stop using Sina.com because of its management instability.
Some reports also said Wang had received encouragement from industrial giants in Hong Kong and the Chinese mainland to buy back Sina.com and regain control of the company.
A Sina.com executive said the new management team had been too busy coping with the management changes to consider the future of the company.
(Chinadaily.com.cn 06/26/2001)
