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You are here: Manufacturing Xaar shares fall after China staff walk out

Xaar shares fall after China staff walk out

Xaar said that sales order processing and product distribution of its technology into China is handled by an independent trading company

Cambridge inkjet technology company Xaar plc has insisted there is no China crisis despite all the staff at its representative office there quitting after complaining of unfair treatment.

While Xaar has rejected the claims after a thorough investigation and said the mass resignation would not undermine earnings, its share price in London fell 2.18 per cent (5.50p) to 242p.

Seven employees and two contractors were employed at the office. Xaar says that at the end of December, the China staff raised some concerns about the perceived unfair treatment of both themselves and some Chinese customers compared to other regions.

The company says it undertook a detailed investigation into the concerns, which included allegations that Xaar's pricing and shipment policies had created an unfair market.

Xaar said it had taken the allegations extremely seriously and, having completed a thorough investigation, found no evidence to substantiate the allegations.

Despite the company’s rigour, the China staff rejected the conclusions of the investigation and have now resigned – despite what Xaar calls “intensive efforts on the part of the company over the past two weeks to resolve the situation amicably.”

Xaar said that sales order processing and product distribution of its technology into China is handled by an independent trading company, and therefore supply channels are not expected to be affected.  “At this stage the impact of the resignations is not expected to be material to Xaar's 2012 earnings,” it added in a statement on London Stock Exchange.

Short term actions to support Xaar's Chinese customers are being implemented immediately and an update on the company's longer term arrangements for China will be provided with its 2011 results announcement on March 20.

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