"Zombie Buyout" iKang (NASDAQ: KANG) Blocks Investor Seeking Answers

Published on September 18, 2017 1:40 PM

(SI Newswire) BOSTON, Massachusetts (September 18, 2017) -- A shareholder was blocked Friday from an iKang Healthcare Group’s (NASDAQ: KANG) quarterly earnings conference call when trying to ask questions about a longer than two-year buyout process that has resulted in hundreds of millions of dollars in market value destroyed for iKang’s shareholders.

“We and other shareholders harmed by this buyout debacle won’t be silenced by iKang’s leadership,” said Peter Halesworth, Managing Partner of Heng Ren Partners LLC. “iKang's paranoia about shareholders asking entirely appropriate questions about why iKang’s Board and management has stood by and allowed, on their watch, hundreds of millions of dollars in market value to be destroyed for shareholders during a longer than two-year buyout process, is stark proof that iKang cannot defend the indefensible.”

On Friday, September 15, 2017 Heng Ren dialed in to iKang’s FY171Q earnings call and was told by the call center, after registering by name to attend, that Heng Ren was not on the list of "invited" participants. Despite no mention of this "invitation-only" restriction in iKang’s widely distributed press release, Heng Ren was blocked from the call. The call center later confirmed there was no “invitation- only” restriction for iKang’s conference call.

iKang’s U.S. Investor Relations contact and public relations consultant is FleishmanHillard.

“This hostile reaction fits a pattern of behavior by iKang,” Halesworth wrote in a letter today to iKang’s Board of Directors. “It is very similar to iKang’s reaction to Meinian Onehealth’s proposed buyout, when Meinian was bidding $25.00 per share. As of Friday iKang’s stock price was at $13.68.”

Heng Ren has published letters outlining how iKang has missed an opportunity to negotiate a sale to Meinian, who bid $25.00 a share in January 2016. Instead iKang reacted with hostility by launching legal and regulatory complaints against Meinian, the highest bidder.

A “white knight,” Jack Ma’s private equity firm Yunfeng Capital, which was co-founded by the Alibaba Group (NYSE: BABA) chairman, announced a bid of $20.00-$25.00 per share in June 2016. However, with no update on the status of Jack Ma\'s Yunfeng bid since it was announced more than 14 months, iKang’s stock has dropped $507 million in value with the overhang of uncertainty about the status of Yunfeng's bid.

“Trying to silence Heng Ren through sabotage, instead of trying to win a battle of ideas in a merit-based free market, shows weakness on iKang’s part,” Halesworth wrote. “One would believe a Harvard University graduate like iKang Chairman Ligang Zhang would know better.”

Heng Ren has asked for a public apology from iKang and a vow to never do this again to another shareholder.

“Retaliation by public companies against investors seeking answers and solutions for problems is viewed very negatively by U.S. lawmakers, regulators, stock exchanges, and courts,” Halesworth added.

Here are the links to the letters to iKang’s Board in English and Chinese:

English version letter

Chinese version letter


Peter Halesworth
Heng Ren
Telephone 917 439 7369