Zhou Zhaoheng's resignation may only be the beginning.

On the evening of September 25, Ruisen Life Services issued an announcement that exposed the company's internal governance conflicts to public scrutiny. Independent non-executive director Zhou Zhaoheng announced his resignation from all positions after expressing dissatisfaction with being removed from his role as chairman of the audit committee without justification. In his resignation letter, he directly criticized the board for lacking "reasonable grounds" for his dismissal, revealing "trust issues" between the board and independent directors.

Behind this seemingly routine personnel change lies the ongoing corporate governance problems that have been brewing at Ruisen Life Services since its trading suspension in 2024. From last year's dismissal of president Li Chunling over unauthorized bonus issues, to second shareholder Ruihua Investment placing personnel in the company's management, and now the public rift between independent directors and the board, a series of events has revealed the complex power dynamics within this property services company.

More concerning is the company's projected loss of at least 90 million yuan for the first half of 2024, a stark contrast to the 63.8 million yuan profit recorded in the same period of 2023. Under multiple pressures including performance changes, shareholder conflicts, and governance disorder, Zhou Zhaoheng's resignation may only be one manifestation of Ruisen Life Services' deeper crisis.

━━━━ Resignation Turmoil Exposes Governance Crisis

According to the announcement, Zhou Zhaoheng clearly stated in his resignation letter submitted to the board on September 22 that his decision to resign stemmed from "disagreeing with the board's resolution to remove his position as chairman and member of the audit committee without reasonable grounds." This statement pointed to issues regarding the reasonableness of the board's decision-making.

Zhou Zhaoheng particularly emphasized that his "continued participation in audit committee work would be helpful and supportive of his continued fulfillment of duties," including participation in "ongoing investigations involving the company's financial affairs." This statement suggests that his removal from the audit committee position may be connected to his ongoing financial investigation work.

In response to Zhou Zhaoheng's statements, the Ruisen Life Services board issued a clarification. In the clarification announcement, the board listed four reasons for the adjustment: compliance with gender diversity requirements under listing rules, the qualifications and experience of newly appointed independent director Deng Huixia, balancing board members' workload, and regulations requiring committee terms to align with director terms.

A senior property analyst commented: "The reasonableness of these explanations is questionable. First, gender diversity requirements could be completely achieved through addition rather than replacement; second, using 'balancing workload' as a reason to remove an independent director from an important position raises questions about the board's true intentions."

This turmoil also reflects deficiencies in Ruisen Life Services' independent director system design. According to the announcement, the terms of reference for each committee stipulate that member terms should be the same as their director terms. "This term-binding system allows the board to easily adjust committee structures when director terms expire, weakening the continuity and independence of independent director supervision. When independent directors' professional judgment conflicts with the board's will, the latter seems more inclined to resolve issues through personnel adjustments rather than communication and consultation," revealed a financial analyst.

━━━━ Governance Conditions Under Shareholder Competition

The underlying reasons for Zhou Zhaoheng's resignation may be found in Ruisen Life Services' shareholding structure and shareholder relationships. A person close to Ruisen Life Services revealed that "the underlying reason for Zhou Zhaoheng's resignation is the result of struggles between company shareholders." This judgment aligns highly with the company's power transition trajectory in recent years.

Reviewing last November, the company announced the dismissal of president Li Chunling, citing allegations that she had unauthorized distributed off-the-books bonuses totaling possibly over 10 million yuan from 2019 to 2023. This major personnel change already indicated internal disputes over control rights within the company.

More obvious power restructuring occurred in December 2024. At that time, Ruisen Life Services conducted a large-scale personnel adjustment, from executive directors to non-executive directors and chief financial officer, with second shareholder Ruihua Investment placing personnel in the company's management. This series of moves marked a major shift in the company's governance power structure.

As the second-largest shareholder, Ruihua Investment obviously hopes to strengthen control over the company against the backdrop of nearly 100 million Hong Kong dollars in floating losses at Ruisen Life Services. This pursuit of control inevitably affects board-level operations, and independent directors' independence also faces challenges.

The direct consequence of shareholder conflicts is low corporate governance efficiency and unclear strategic direction. The company had already experienced a nearly three-month trading suspension due to shareholder conflicts last year, and the current suspension has now lasted over a year. This prolonged trading halt not only damages shareholder interests but also reflects the company's internal inability to reach consensus on major matters.

Against the backdrop of overall performance pressure in the property services industry, disagreements between Ruihua Investment and controlling shareholders on corporate governance, strategic layout, and investment direction may further widen, with independent directors often becoming subjects of influence in such power struggles.

Notably, Ruisen Life Services' operating conditions are deteriorating. The company expects to record losses of at least 90 million yuan in the first half of 2024, a huge contrast to the 63.8 million yuan profit performance in the same period of 2023. More worryingly, Ruisen Life Services' revenue growth rate has declined for five consecutive years, from 48.77% in 2019 to 15.19% in 2023. Under such operating pressure, conflicts of interest between shareholders are more easily triggered, and corporate governance stability faces greater challenges.

Zhou Zhaoheng's resignation may only be the beginning. What Ruisen Life Services needs to address is the fundamental question of how to build a healthy corporate governance system.