A Study On The Control Rights Contest Of Listed Companies And Its Influence

With the gradual completion of the split share structure reform and the promotion of the mixed ownership reform in China,the equity structure of listed companies in China has become more diversified,the capital market has become more vibrant,and there are more and more institutional investors.Moreover,in recent years,to help improve the overall level of management of the capital market,the state has actively promoted institutional investors to participate in corporate governance.Driven by this general environment,more and more institutional investors have begun to pay attention to the internal governance of listed companies and actively participate in governance.However,the competition for control of listed companies is increasing.Different from the famous events such as Gome’s infighting and Wanbao’s struggle in earlier years,the events of control struggle in recent years will not cause external investors to follow the trend of speculation,but quickly drag down corporate governance and operation,making it marginalized in the capital market.Therefore,it is of practical significance to study such control struggle events and find ways to prevent them.This thesis takes the control right fight event of Dalian Sunasia,which aroused widespread concern in the society in 2020,as an example,to analyze the causes of the fight and its impact on the company.It finds that the company’s own serious governance problems lead to increased risk of control right fight,and governance defects are used by external capital,which ultimately leads to the control right of the company being held by the competitors.Studying this case can ring an alarm for enterprises with risk of control transfer,make them pay attention to corporate governance,improve governance environment in time,optimize corporate governance structure,and reduce the possibility of control struggle.This thesis begins with a basic introduction to the research background and significance,and combs and summarizes the literature related to the fight for control.Before entering the case study,the author first defined the relevant concepts of control struggle,summarized the reasons and effects of control struggle in general,and also elaborated the theoretical basis supporting this thesis.After that,it began to enter the case overview stage.This part first introduced the main body of the case event and the basic information of each participant,and then divided the process of contention into four stages according to the chronological order.After that,this thesis starts to analyze the reasons for the fight for control from the perspective of the main body itself and the competitors.This thesis finds that the dispersion of the company’s ownership structure,the lack of awareness and ability of controlling shareholders,the defects in the company’s articles of association and the weak internal supervision are all important reasons for the fight for control,and obtaining more benefits is the main reason for the competitors to initiate the fight.Then,this thesis analyzes the impact of control struggle on the company from three aspects: market performance,financial performance and corporate governance,and describes the path of the impact.In terms of market performance,the publicity of major events such as the raising of external investors’ cards and the replacement of key management personnel during the fight for control can affect investors’ confidence and thus affect market performance.Through the analysis of the changes in Dalian Sunasia’s share price before and after the fight for control and the cumulative abnormal return at important time points,this thesis finds that the important events in the process of control struggle will have an impact on the short-term market performance of Dalian Sunasia,but the specific market performance depends on the attitude of investors to the event.The continuous impact of control struggle led to the sharp decline of Dalian Sunasia’s share price.In terms of corporate governance,changes in the ownership structure in the struggle for control have resulted in an imbalance in the board of directors,a reduction in the effectiveness of the shareholders’ meeting,and a significant turnover of the management,reducing the effectiveness of corporate governance.In terms of financial performance,Dalian Sunasia’s debt paying ability,operating ability,profitability and development ability were all adversely affected to varying degrees during the fight for control,especially the profitability declined most significantly.Finally,this thesis summarizes the above analysis and draws conclusions:First,corporate governance defects provide opportunities for external capital to compete for control;Second,obtaining more income and high-quality resources is the main reason for the fight for control;Third,the fight for control will bring many adverse effects to the company.Based on the analysis of the case of Dalian Sunasia’s struggle for control right,this thesis also puts forward suggestions on preventing and responding to the competition for control right by external capital for companies with risk of control right transfer,including establishing a reasonable equity structure,improving the corporate governance structure,paying attention to the shareholding status of shareholders in a timely manner,and strengthening the restriction of the restrictive clauses of the board of directors.