SMIC Shares Slump Over Reports of Executive Resignation

This post was originally published on this site – Chinese chipmaker Semiconductor Manufacturing International Corporation (SMIC) saw its shares dive on Wednesday over reports that a top executive reportedly tendered a surprise resignation.

SMIC’s Shanghai shares (SS:688981) fell 7.38% to CNY54.12 ($8.27) by 11:26 PM ET (3:26 AM GMT), after plunging up to 9.8% lower earlier in the session. The company’s Hong Kong shares (HK:0981) were suspended from trading.

A stock exchange filing said that SMIC is checking the veracity of a resignation letter circulated in online media outlets and reportedly written by co-Chief Executive Officer Liang Mong Song. The company is trying to contact Liang to clarify his intentions but did not provide further details.

The U.S. Department of Defense added the company to a blacklist of alleged Chinese military companies on Dec. 4, labelling it as a national security threat.

Three other companies, China National Offshore Oil Corporation, China Construction Technology Co. Ltd. and China International Engineering Consulting Corporation, were also added to the blacklist on the same day. The addition of the four companies brings the total number of companies on the list to 35.

Inclusion in this list means that Americans will be restricted in their dealings in SMIC’s traded securities, or any securities that are derivative underlying such securities, according to a press release.

All Americans are not allowed to purchase the company’s securities for 60 days starting from Dec. 4 in Beijing, and all Americans will not be allowed to deal in SMIC securities 365 days therefrom, according to an executive order issued by U.S. President Donald Trump on Nov. 12, the press release added.

Founded in 2000 and headquartered in Shanghai, the company is China’s largest foundry specializing in the manufacture of semiconductors. SMIC is also at the center of Chinese ambitions to build a domestic semiconductor industry and wean the country off its dependence on U.S. chip technology.

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