Greentech Lead Asia: Suntech Power announced Susan Wang, Julian Worley, and Mr.Zhizhong Qiu resigned as directors of the company with immediate effect.
The directors indicated that “they could no longer serve effectively as independent directors for reasons that included not being provided with information that was critical for them to fulfill their responsibilities and the Company’s failure to implement some of their proposed actions.”
Suntech Power, with 2,000MW of annual production capacity at the end of 2011, had filed for bankruptcy in late March after the company defaulted on a $541 million bond payment.
The issues of concern cited by the departing directors were the following:
Difficult prospects on completing consensual restructuring with convertible bondholders; lack of clear business plan; loss of critical talent and potential severe HR retention issues; failure to pay outside legal counsel; potential erosion of internal controls; and impairment of employees’ ability to function effectively.
Remaining directors of Suntech Power include Philip Fan, Michael Nacson, Kurt Metzger, Weiping Zhou, Zhengrong Shi, and David King.
Following the new development, Michael Nacson was elected as Chairman of the Board. The remaining directors also appointed Nacson and Fan as members of each of the Audit Committee, Compensation Committee, and Corporate Governance and Nominating Committee.
Worley and Wang had previously served as the two members of the Company’s Audit Committee. Worley and Qiu had previously served as the two members of each of the Company’s Compensation Committee and Corporate Governance and Nominating Committee.
The remaining three independent directors, Fan, Nacson and Metzger, are of the view that the matters of concern cited by the resigning directors are demonstrative of disharmony and issues of communication between the executive management and the resigning directors that decreased the efficiency of the Board’s decision-making process. They believe the large size and geographic dispersion of the Board as previously constituted was not ideal for the Company involved in a debt restructuring process because of the need for frequent in person board meetings to discuss and analyze complex issues.
The remaining three independent directors see progress being made in regard to the issues raised by the resigning directors; and believe the Board is now configured to function more effectively and efficiently with a smaller number of members, including recently appointed directors who have skills and experience relating to complex corporate restructurings.