Inharmony Behind The Perfect "Marriage"-Enlightenment By Ping An Takeover Jahwa

"LIU SHEN","HERBORIST","MAXAM"… Jahwa Group and ShanghaiJahwa, the founder of those nationwide famous brands, were taken over by PINGAN Group at the end of2011. As the only existing case of a successfultransformation of the stated-owned enterprise, the takeover was viewed as a perfectcombination of financial capital and industrial capital. In May2013, over a yearlater, there are some inharmonious sound from this seemingly perfect "marriage":Wenyao Ge criticize PING AN Trust in public, PING AN Trust dismissed WenyaoGe of his duty in Jahwa Group due to "off-book petty cash" problem, ShanghaiState Assets Administration Committee try to intervene, PING AN Trust forcedWenyao Ge for early retirement from Shanghai Jahwa, etc…Since the successful landing in the domestic capital market in year2001,Shanghai Jahwa has made remarkable achievements under the leadership ofWenyao Ge, who is known as "Godfather of Jahwa", and became the domesticindustry leader in China market among the severe competition with all theinternational industry competitors. However, in order to completely get rid of theshackles of state-owned enterprise system to achieve more rapid development,Jahwa Group launched the restructuring, during which, PING AN Trust won in thefierce competition and successfully obtained the100%shares of Jahwa Groupthrough bidding at the end of2011. Instead of the rapid development of ShanghaiJahwa and Jahwa group after the takeover as expected, the two parties wereactually "fighting against each other" in such a short period of time. Jahwa Group is the controlling shareholder of Shanghai Jahwa, a listedcompany. It held29.23%listed company shares, which is also the mostrepresentative assets of Jahwa Group. In this article, through the analysis ofShanghai Jahwa, especially its achievements in the recent10years after its listing,from aspects, such as development direction, business model, DuPont financialanalysis, capital market performance and comparison with the same industry, etc.to focus on the existing issues and difficulties on its way to success, which madethe introduction of a new investors necessary and urgent for Jahwa Group andShanghai Jahwa.This article also reviews the process of the takeover and the fights betweenthe two parties, in order to further analyze the cause and effect the whole incidentand to anticipate the possible future development of Shanghai Jahwa.This article has made exploratory thinking in areas such as corporategovernance, how to effectively monitor and manage transfer of state-owned equity,measures to be taken to avoid conflicts in the transfer of state-owned equity, aswell as raising corresponding conclusions and recommendations.