Golden Harvest profit drops, execs go

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HONG KONG -- Golden Harvest on Tuesday reported lower profits for the second half of 2007 and said that it has cut ties with two senior executives.

The company recorded a profit of HK$3 million ($397,000) for the six-month interim ending December 2007, a quarter of what the company earned during the same period in 2006. In October 2007, Chinese powerhouse Chengtian Entertainment Group became the single-largest stakeholder in Golden Harvest.

Executive director David Chan and non-executive director Phoon Chiong Kit resigned from the company, effective March 24 and 28, respectively, Golden Harvest said in a filing to the Stock Exchange of Hong Kong.

Phoon's contract as executive director and managing director was terminated in December, but he rejoined the company a week later as a non-executive director, following the resignation of non-executive director Paul Ma in protest of Phoon's termination.

The company had previously stated its dissatisfaction with Phoon's performance, however, the Tuesday announcement about the duo's resignation stated that neither has disagreement with the board.

Meanwhile, current vp business development Shen Demin was appointed as executive director. Chengtian president and CEO of Golden Harvest, Wu Kebo, will stay on as acting managing director in view of his experience in a managing role in media and entertainment, although this deviates from the code of corporate governance practices set by the SEHK. Another individual will be appointed as CEO in due course, the company said in its interim report.

Focused mainly on film exhibition, Golden Harvest sold its Malaysian cinema chain TGV in February to reallocate resources to its theaters in China, Hong Kong, Taiwan and Singapore, which now include 23 cinemas with 187 screens. A profit of HK$60 million ($7.8 million) is expected in the second half of 2008 because of the sale, the report stated.

Golden Harvest is now developing multiplexes in the Chinese cities of Wuxi, Hangzhou, Suzhou, Beijing and Shanghai. It also is planning to expand its number of screens in Shenzhen, where it has about a 30% market share and ranked as the second highest-grossing cinema in China, claiming 24 million yuan ($3.4 million) from June to December 2007.
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