C.K. Tang failed to delist the company until the third attempt in 2009.
Many shareholders were upset with the management, accusing the latter of diluting shareholdings through employee stock options to facilitate delisting.
The management was holding close to 90 percent of the company and offered a delisting price of $0.83. To many it was seen as a low ball offer considering the fair value of $0.93.
The company went ahead with the delisting and subsequently offered an exit for the remaining shareholders at $1.30, two years later.
Delisting at a low offer price relative to valuation is one of the most common ways of taking advantage of the minority shareholders and C.K. Tang was among one of the handful in history.
One might question the existence of shareholders’ rights.
