Research On The Economic Consequences Of Control Right Struggles Of Listed Companies

Control right is a core and hot issue of moderm corporate governance.It refers to the power that can exert a great influence on a company,and the power to choose the major governance and to decide on important issues of the company.With the rapid development of capital markets and the drastic expansion of financing activities,the control of the company may transfer,which may lead to the occurrence of control right struggles.In the struggle,it involves founders,management,external investors or even stakeholders,which will have a profound impact on the company and bring about a series of economic consequences.The control right struggle of NVC Lighting is one of the most typical events in recent years,triggering much attention of all walks of life.The three struggles of control rights took a long span of time and involved many subjects.Respectively,the financial performance,market performance and corporate governance structure had been impacted by them to various degrees,which is worth in-depth study.This paper studies the control right struggles of NVC Lighting and the economic consequences in different aspects and relevant enlightenments,using the method of case study.It is composed of four parts:The first part is the theoretical analysis of control right struggle,defining the meaning and types of it.The theoretical basis for control right struggle is also reviewed.The second part is the case analysis of the control right struggle of NVC Lighting,including a brief introduction of NVC Lighting and the process,reasons and results of the struggles according to three stages.The third part is the economic consequences analysis of the control right struggle of NVC Lighting.The paper has found out that:The first struggle was an internal one around the founders.Through qualitative analysis of the company's performance and the honor at home and abroad,it is found that the company developed well during the first struggle.In the governance structure,the share of Wu Changjiang continued to rise until it was fully held,and the structure of the board of directors and management also reflected his core position in corporate governance.This single system of governance was beneficial to NVC Lighting which needed to be expanded in the early stage.However,the highly centralized governance structure did not conform to the characteristics of the corporate governance structure.It encouraged the overconfidence of founding shareholder and paved the way for the next two struggles.In the second struggle,this paper chooses Foshan Lighting and the average level of the industry to analyze the financial performance of NVC Lighting from 2007 to 2012.The result shows that the struggle slightly declined the solvency of the company and greatly declined the profitability.But at the same time,it improved the company's operating efficiency.While analyzing the changes in stock prices during the struggle,it is found that several fierce struggles caused investors' confidence to drop off,which had a negative impact on market performance.In the case of external investors involved,the company's ownership structure was increasingly diversified.In the board of directors and the management,the proportion of social capital exceeded the founding shareholder,which helped improve the corporate governance structure.The third struggle was between Wu Changjiang and the White Knight.By analyzing the absolute and relative indicators of profitability from 2013 to 2016,it is found that the revenue and profit dropped significantly,and even a loss occurred as a result of missing the peak season of sales.By calculating the enterprise value,it is found to have decreased slightly during the struggle,while the decrease was more pronounced in the following years,which reflected the lag of the impact of enterprise value.In the governance structure,NVC Lighting gradually established a diversified shareholding structure after the third struggle.Also,internal and external balances could be achieved in the management.Different stakeholders tended to coordinate and promoted,which leaded to the transformation for a governance model of modern corporation.The fourth part is the suggestions for the three struggles of control rights:For founders of the company,it is recommended to optimize the governance structure,improve the ability and quality of corporate governance,solve the internal conflicts of founders,and actively introduce outstanding professional managers.So that the corporate governance structure could be improved;For institutional investors,they should respect the founders and participate in corporate governance as a role of supervisor;For shareholders,they ought to express their needs rationally and adhere to the principle of valuing long-term interests.This paper helps enriching the research on the control right struggles and expanding the case studies of this topic into multiple aspects of economic consequences.That will have certain enlightenment on the relevant research.In addition,the paper has a comparatively strong practical significance for improving the governance of listed companies as wells as avoiding vicious struggle for control rights.