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United States Securities and Exchange Commission
Washington, D.C. 20549
Form 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the Month of December 2004
Commission File Number 1-13522
CHINA YUCHAI INTERNATIONAL LIMITED
(Translation of registrant's name into English)
16 Raffles Quay #26-00
Hong Leong Building
Singapore 048581
(Address of principal executive offices)
(Indicate by check mark whether the registrant files or will file
annual reports under cover Form 20-F or Form 40-F.)
Form 20-F X Form 40-F
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(Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the information
to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act
of 1934.)
Yes No x
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If "Yes" is marked, indicate below the file number assigned to registrant in
connection with Rule 12g3-2(b): Not applicable.
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This Report on Form 6-K shall be deemed to be incorporated by reference in the
prospectus, dated March 24, 2004, of China Yuchai International Limited (the
"Company" or "CYI") included in the Company's Registration Statement
(Registration No. 333-111106) on Form F-3 and to be part thereof from the date
on which this report is filed, to the extent not superseded by documents or
reports subsequently filed or furnished by the Company with the U.S. Securities
and Exchange Commission (the "SEC").
Other events
Corporate governance at Yuchai
As previously disclosed, CYI called for a meeting of the shareholders of
Guangxi Yuchai Machinery Company Limited ("Yuchai") on December 6, 2004 to
discuss recent corporate governance developments at Yuchai. CYI's six
wholly-owned subsidiaries, which together hold 76.4% of Yuchai's shares, served
notice on Yuchai calling for such meeting on October 29, 2004, and Yuchai
published the requisite notice calling for such meeting in the China Securities
Daily on November 4, 2004.
Yuchai's articles of association require Yuchai's board of directors to convene
an interim meeting of Yuchai's shareholders upon the request of shareholders
holding a stipulated number of Yuchai's shares, and CYI's six wholly-owned
subsidiaries own in excess of the requisite number of shares to rely on such
provision. However, notwithstanding this provision, Yuchai's chairman, chief
executive officer and legal representative, Mr. Wang Jianming, together with
representatives of Guangxi Yuchai Machinery Holdings Company (the "State Holding
Company") and other Chinese stakeholders in Yuchai, made an attempt to disallow
the meeting to proceed. Despite this attempt, and based on the advice of the
Chinese legal counsel to the foreign shareholders of Yuchai, the meeting was
continued and chaired by Yuchai's deputy chairman, Mr. Gao Jia Lin. At such
meeting, CYI's six wholly-owned subsidiaries unanimously passed the following
shareholder resolutions:
1. To approve the appointment of Mr. Philip Ting Sii Tien and Mr. Gan Khai
Choon to the board of directors of Yuchai;
2. To authorize the taking of appropriate legal and other action to protect
the legal rights and interests of the foreign shareholders in Yuchai in
light of the inappropriate actions of Yuchai's chairman, chief executive
officer and legal representative, Mr. Wang Jianming;
3. To approve the continued service of Mr. Qin Xiao Cong and Mr. Yuan Xucheng
on the board of directors of Yuchai;
4. To declare invalid under relevant Chinese law and Yuchai's articles of
association the resolution taken by Yuchai's board of directors on
September 9, 2004 ratifying the prior disbursement by Yuchai management of
Rmb205 million (approximately US$30.2 million) by Yuchai management as a
loan to Yuchai Marketing and Logistics Company Limited, a related company
majority-controlled by the State Holding Company and Coomber Investments
Limited ("Coomber"); and
5. To authorize the Yuchai directors representing the foreign shareholders of
Yuchai to not attend the meeting of the Yuchai board of directors
scheduled for December 7, 2004 and to cancel the meeting on the grounds
that a majority of the agenda items prepared for such meeting were beyond
the scope of authority of the Yuchai board of directors pursuant to
Yuchai's articles of association and relevant Chinese law and were instead
exclusively within the authority of Yuchai's shareholders.
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Written notice of these resolutions has been served on Yuchai and the relevant
Chinese government authorities, and CYI is taking active steps to require
implementation by Yuchai management of these resolutions. In addition, CYI has
instructed its Chinese legal counsel to demand Yuchai take all necessary action
to seek immediate repayment of all outstanding amounts under the Rmb205 million
loan described in item 4 above.
These matters were discussed at a meeting of the CYI board of directors on
December 7, 2004 and the board directed its Special Committee to investigate
these issues and take action as necessary to preserve the value of CYI's
investment in Yuchai, including initiating legal and/or arbitration proceedings
if required. As previously disclosed, the Special Committee's mandate includes
addressing issues relating to the implementation of the July 2003 Agreement, as
well as reviewing and resolving difficulties which CYI experiences from time to
time in obtaining the cooperation of the Chinese shareholders of Yuchai in the
management and operation of Yuchai.
As disclosed in CYI's Annual Report on Form 20-F filed in June 2004, during the
several months prior to that filing, the parties to the July 2003 Agreement and
their advisors had been actively seeking to agree on a restructuring plan for
CYI. Since then, discussions with the Chinese stakeholders including Coomber
and their respective professional advisors regarding implementation of the July
2003 Agreement have continued. Proposals and counter-proposals for the
potential spin-off of Yuchai have been presented and are under discussion by
the respective parties.
On December 5, 2004, Mr. Wang Jianming on behalf of Yuchai, wrote to CYI
indicating that unless a restructuring proposal is agreed by January 1, 2005,
the Chinese stakeholders may conclude that the July 2003 Agreement cannot be
implemented. Although CYI remains committed to working towards an agreed plan
with the parties to the July 2003 Agreement with the goal of enhancing value
for its shareholders as expeditiously as possible, CYI believes that the parties
may not be able to implement a restructuring in the manner contemplated in the
July 2003 Agreement within the timeframe stipulated by Yuchai or in the near
future. Accordingly, CYI is unable to predict at this time whether the Chinese
stakeholders will continue to respect the terms of the July 2003 Agreement in
the future.
No assurances can be given that disagreements with Yuchai's Chinese
stakeholders will not recur in the future, or that CYI will continue to be able
to fully exercise its controlling interest in Yuchai if such disagreements
recur, the result of which could have a material adverse effect on CYI's
financial condition, results of operations, business or prospects, including
CYI's inability to consolidate Yuchai's financial statements or receive
dividends from Yuchai.
CYI's Special Committee
The current composition of CYI's Special Committee is set forth below:
Wong Hong Ren (Chairman)
Teo Tong Kooi
Gao Jia Lin
Raymond Ho
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunder duly authorized.
Date: December 15, 2004
CHINA YUCHAI INTERNATIONAL LIMITED
By: /s/ Philip Ting Sii Tien
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Name: Philip Ting Sii Tien
Title: Chief Financial Officer and Director
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