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Explainer | Here’s why Vitasoy needs to overcome the ‘Get out of mainland China’ boycott after stock market beating
- Shares plunged 10 per cent in the five days to July 9, only the sixth time they have lost by at least that much on a weekly basis in the past decade
- Leaked memo seen as sympathetic to ‘lone-wolf terrorist’ triggered a boycott by consumers, celebrities in mainland China
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Vitasoy International, one of Hong Kong‘s largest non-carbonated beverage manufacturers, is facing possibly its biggest corporate crisis in recent decades following a consumer boycott in mainland China over a leaked internal memo.
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That memo, penned by a now-dismissed employee, was sympathetic to the family of a manager whom police described as a lone-wolf terrorist, who attacked a policeman, before fatally turning it on himself.
Vitasoy shares plunged 10 per cent to HK$26.45 in Hong Kong last week, wiping out HK$3.15 billion (US$406 million) of market value. It was the biggest drop since a 21 per cent slump in the week to May 29 last year. It also marked only the sixth occasion they have crashed by more than 10 per cent on a weekly basis in the past 10 years.
Here’s what you need to know about the drink manufacturer and the controversy surrounding the memo and the ensuing boycott in mainland China.
What did the memo say and why did it trigger a storm
Leung Kin-fai, a 50-year old purchasing agent, stabbed a Hong Kong policeman in the back before killing himself on the 24th anniversary of the city’s return to Chinese sovereignty.
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