These developments are somewhat concerning -- why are so many talented executives leaving? To lose two members of the senior executive team so close together is troubling.
If the General Counsel's departure is indeed confirmed, it begs the question of why Shanda has not announced his departure. While legally Shanda does NOT have to announce anything because they are not an American company, we think that investors should be told of such a high profile exit, especially after the CFO's departure.
This would be a hallmark of disclosure and transparency. We hope that Shanda will use its privileged position and cash horde to become a major leader of Chinese companies with respect to disclosure and transparency issues.
Until that day, as I wrote in a recent Businessweek article, it will be difficult for retail investors in the US to continue to invest in Chinese companies.
When will many of China's major internet companies understand that disclosure has an overall positive impact on stock price?
Shaun Rein is the Managing Director of the China Market Research Group and has been living in China for 9 years. He received his graduate degree from Harvard focused on China¡¯s economy and served on the Advisory Committee for Shareholder Responsibility to the Harvard Corporation. He is fluent in Mandarin.
The China Market Research Group helps American and European companies enter or expand in China by getting them the market intelligence they need to make informed decisions.