"Barbarians At The Gate":Control Market And Corporate Governance

2016 China's capital market situation,one of the most eye-catching must be that the insurance funds frequently placard listed companies.This phenomenon is very similar to the leveraged buyout trend in the last century 80's of the United States.In a series of placards,problems such as competition for the control of listed companies,leveraged acquisitions begin to appear,causing capital market volatility.At the same time,risks such as the liquidity crisis of insurance funds,term mismatch,profits transfer also begin to emerge.Ferocious insurance funds placards storm also attracts the market questioning and regulators high attentions.CSRC says that parts of the insurance funds are "barbarians at the gate" "bandits of the industry" in the capital market,a series of regulatory measures followed.Among them,the competition for control rights of Vanke starting in July 2015 is the most controversial event.From Baoneng placarded,Wang Shi tough against,seeking Shenzhen Metro Group unsuccessful,to Hengda showed suddenly,the regulators joined and then the CIRC made Yao Zhenhua ten years ban.China Resources transferred 15.31%of Vanke shares to the Shenzhen Metro,Hengda entrusted the voting rights irrevocably to the Shenzhen Metro,Baoneng from the largest shareholder into the "second largest shareholder",Shenzhen Metro to achieve the holding.Controversy over capital market issues and corporate governance triggered by the incident has become an unprecedented event in Chinese capital history.This paper first introduces the corporate governance theory,control market theory,shareholder activism theory and related literature review.Mainly from the structure of ownership as internal governance mechanism and institutional investors hostile takeover as external governance mechanism two aspects provide normative theoretical support for subsequent case studies.Then,this paper reviews in detail about the whole process of the competition for the control of Vanke.And mainly answers the two questions:first,Baoneng is how to buy Vanke,why is called "barbarians at the gate";second,Vanke is how anti-takeover,exposes what kind of corporate governance issues.On the basis of the above,this paper expounds the reason and background of the "barbarians at the gate" in the 1980s of America,and analyzes the current economic development of China.Then,interpret the roles and the deep-seated reasons behind the behavior of Vanke management,the original largest shareholder China Resources Group,the other players on the control market Hengda Group and regulators in the Vanke event.Finally,it is concluded that the motive of Vanke being placarded is the decentralized ownership structure.The essence of the contention is the entrusted agent problem among the founder and the manager,the big shareholder and the institutional investors.Institutional investors gradually highlight.The enterprise should pay attention to the control institutional protection.And put forward four aspects of the proposal:standardize corporate governance,follow the contract spirit;gradually open dual equity governance model;add anti-takeover terms in the company's articles;management strengthen the guidance of "shareholder activism" road.