SHANGHAI, April 2, 2012 /PRNewswire-Asia/ -- Ron Chan, ex Chairman and CEO of ChinaCast Education Corporation (NASDAQ: CAST) has today resigned from the board and issued the following letter to the shareholders:
I have resigned from the Board of ChinaCast Education Corp. today. I have come to this decision because of serious disagreements that I have with the group of directors who recently has come to control the Board and the Company.
After the election of Ned Sherwood's slate of directors at the annual meeting in January of this year, Mr. Sherwood, and persons acting in concert with him, which I believe to include Daniel Tseung, Derek Fang, funds managed by Fir Tree Partners, and other shareholders, acting in concert and in furtherance of a pre-existing plan, sought to and did take control of the Company. They then acted to promote their own interests at the expense of the Company and its other shareholders.
For example, Mr. Sherwood's group pushed the Company for a settlement of $2.3 million with Ned Sherwood on his bogus claims against the management and the Company. When Michael Santos and I strongly objected to this settlement, we were essentially pushed out of the Company, notwithstanding our years of loyal and valuable service. Although I remained on the Board, important decisions were made without any prior communication with me or with the senior management. Without any proper authorization, Mr. Sherwood, purporting to represent the Board, instructed PRC management to take instruction directly from the Board (i.e. from Mr. Sherwood) and not from the executives (i.e. me). Without proper authorization, Derek Feng announced the removal of Mr. XY Jiang as President, China. Mr. Jiang has been with the Company for 11 years and has been a trusted employee and a partner holding 40% of the VIE company, CCLX. I have been told that new Company management has been threatening Company employees and creating a hostile and terrifying atmosphere, rendering the Company largely dysfunctional.
In addition, I have personally been threatened by Mr. Sherwood's group with threats of bogus lawsuits, claiming that I have stolen Company property, have sabotaged efforts to complete the Company's filings in a timely manner, and have engaged in insider trading.
Not only are all of these allegations untrue, those who make them know they are untrue and they are doing so, I believe, to distract attention from their own conduct that is severely hurting the Company. I have retained no Company property; I have done nothing to interfere with the filings; I have always acted in the best interests of the Company and will continue to do so; I have not sold a share of stock of the Company; and I have revealed no non-public information about the Company to anyone. These heavy handed tactics, based on nothing but falsehoods and apparent desires to promote self-interests, however, seem, unfortunately, to be the way the new Board conducts its business.
This is not the Company that I worked hard to create and grow. I fear that the direction the Sherwood-led Board is going in will ruin the Company. Simply put, the current Board and the new executives do not have the experience to run the business. For those reasons, I am resigning from the Board.
SOURCE Ron Chan