ChinaCast Education Corporation (NASDAQ: CAST) is one of the Chinese companies where investors might not be best served by management. Infighting at the board of director level appears to be met with resignations and delayed financial filings. Today’s news looks like dysfunctional behavior at its best.
Ron Chan, ex-Chairman and CEO of ChinaCast has now resigned from the board of directors over serious disagreements with the group of directors. Then came news from the board of directors which issued a scathing letter to shareholders. FULL LETTER
To add insult to injury, NASDAQ halted trading in the stock. When investors get into stocks that have management infighting it rarely turns out that well. Keep in mind that this is in China as well, and we have said over and over that perhaps the most evident example in freedom speech comes from financial officers of companies which listed shares in America.
ChinaCast provides post-secondary education and e-learning services in China. This is a situation which seems far from over.
Shares went out down 4.5% on Friday at $4.24 and the 52-week trading range is $2.27 to $6.91.
JON C. OGG