TCL Communication said yesterday Managing Director Wan Mingjian is to resign his position, citing health reasons.

TCL's announcement comes amid widespread rumours that Wan is to take up a role at Changhong Group's mobile phone business unit after leaving Hong Kong-listed TCL.

It is reported Wan is to join Guohong Telecommunications, a unit of Changhong Group, to explore mobile opportunities with a registered capital of 200 million yuan (US$24 million).

"Wan is to quit his job on June 20 as a managing director for personal reasons at the shareholders' annual conference... Wan confirmed that there is no disagreement between the board of directors and him," the company said in a statement. There has been no immediate response from Wan.

But the writing has been on the wall since December when he quit as general manager of TCL Mobile, a subsidiary wholly owned by TCL Communications; chairman and chief executive officer of TCL & Alcatel Mobile Phones Ltd and president of the Communications Department of TCL Group.

Analysts believe Wan's health is not the cause of his departure.

"Bad business performance in the past year was the major reason for his leaving," said CITIC Securities analyst Zhang Bin.

As one of the largest equipment makers in China, mobile phones and home electrical appliances are the major revenue generators for TCL Group.

However, sales of its mobile phones have dropped significantly compared to a year ago.

"Though it is quite natural that there is a business management team reshuffle when facing difficulties, we have to adopt a wait-and-see attitude to Wan's departure," Zhang said.

Wan had led TCL to become the country's number two handset maker in 2003.

Zhang believes Wan's leave is good news for Changhong Group, "if Wan is to join its handset business as reported."

"I believe the rich experience that Wan had in the handset industry will contribute a lot to boost Changhong's handset business as a newcomer," he said.

Changhong Group established subsidiary Guohong Telecommunications in March. It is now applying for a licence for mobile phone manufacturing.

(China Daily June 8, 2005)