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China News Service, August 2: Dismissing Dong Yuhui and giving him a one-time severance pay? New Oriental denies it.

According to the WeChat account "New Oriental" on the 2nd, New Oriental issued a statement saying that at the New Oriental Group's fourth quarter earnings conference for fiscal year 2024, an analyst asked about the relevant costs and expenses paid by the company to Dong Yuhui, and used the term "one-time compensation". This expression was misunderstood by some people as a one-time severance pay given to Dong Yuhui by New Oriental Group in order to dismiss him.

The statement said that the separation of Yuhui Xingxing from Dongfang Zhenxuan was the result of friendly consultations and consensus between the two parties, and there was no dismissal. The company arranged to pay all the income of Yuhui Xingxing since its establishment and all the funds related to the equity transfer of Yuhui Xingxing to Dong Yuhui, which was a support for the continued development of Dong Yuhui and Yuhui Xingxing in the future, rather than severance pay.

After the market closed on July 25, Oriental Selection issued several announcements on the Hong Kong Stock Exchange, announcing that it would "first break up and then separate" with its anchor Dong Yuhui.

Dongfang Zhenxuan announced in the announcement of "Friendly Departure of the Group's Well-Known Anchor" that Dong Yuhui has decided to no longer serve as an employee or manager of Dongfang Zhenxuan. Dongfang Zhenxuan also disclosed that it would sell its subsidiary Yuhui Tongxing (Beijing) Technology Co., Ltd. (hereinafter referred to as "Yuhui Tongxing") to Dong Yuhui for a net asset value of RMB 76.585 million.

Yu Minhong, chairman of the board of directors of Oriental Selection, also published an open letter on his personal WeChat account stating that Oriental Selection's wholly-owned subsidiary Yuhui Tongxing will officially become independent from Oriental Selection, with Dong Yuhui personally holding 100% of its shares.

"In order to express my gratitude to Yuhui, in addition to paying all the promised benefits, I have requested and obtained the consent of the board of directors and the compensation committee to reward Yuhui with all the net profits of Yuhui Tongxing. At the same time, Yuhui holds the equity purchase funds required by Yuhui Tongxing, and I have arranged the payment in accordance with the rules of listed companies and the company's articles of association. In order to ensure the normal operation of Yuhui Tongxing's business, Oriental Selection will deliver the developed information system to Yuhui Tongxing free of charge with the consent of the board of directors." Yu Minhong wrote in an open letter.

Affected by Dong Yuhui's "solo" move, the share price of New Oriental-S (09901.HK) has experienced a significant correction recently. On August 1, New Oriental-S's maximum intraday decline exceeded 17%, and it closed down 7.85% on the same day. As of midday on August 2, New Oriental-S fell 7.53% to HK$46.65 per share, down 18.87% from the closing price on July 25. The share price of Oriental Selection went against New Oriental's, and there was a short-term jump after the announcement. As of the midday close of Hong Kong stocks, Oriental Selection rose nearly 13%. (China News Service APP)