FRANKFURT/HONG KONG (Reuters) - Ultrasonic AG, a Chinese footwear maker listed in Germany, said most of its cash reserves in China and Hong Kong had disappeared and it had lost trace of its chief executive and chief operating officer.
The mystery is likely to fuel concerns about corporate governance in the world's second-biggest economy, at a time when shortsellers are targeting smaller Chinese companies with claims of falsified statements to auditors and dubious management practices.
Ultrasonic's Frankfurt-listed shares plunged 72 percent on Tuesday to close at 1.798 euros in heavy volume, after it revealed that almost all of its cash in China and the two top executives had vanished.
"Most of the company's cash funds at PRC (People's Republic of China) and Hong Kong levels have been transferred, being no longer in the company's range of influence," Ultrasonic said in a statement.
Chief executive Qingyong Wu and chief operating officer Minghong Wu have been missing since the weekend, Ultrasonic said.
Its German holding company still had a "relevant six-figure amount" at hand to meet its payment obligations.
In August, the company which is valued at $29.5 million, said it had secured a $60 million credit facility from Nomura International (Hong Kong) Ltd to help fund acquisitions.
The facility could be drawn within three months of the deal being signed, it added. It was unclear how much credit had been extended by Tuesday. Nomura declined to comment when contacted by Reuters.
Finance chief Kwong Clifford Chan and the supervisory board were in talks with authorities and business partners, trying to clarify the situation.
Ultrasound said last week that Chan would step down on September 30 for family-related reasons.
Another Germany-listed Chinese manufacturer, Youbisheng Green Paper, initiated insolvency proceedings earlier this year after its CEO went absent without explanation.
(Reporting by Ludwig Burger in FRANKFURT and Anne Marie Roantree in HONG KONG; Editing by Christoph Steitz and Stephen Coates)