Research On The Motivation And Economic Consequences Of The Special Voting Rights Arrangement Under The Dual Shareholding Structure Of Ucloud

For scientific and technological innovation-oriented enterprises,founders play an irreplaceable role in guiding enterprise development and leading enterprise innovation,Most founders abroad maintain control through special voting arrangements.Due to the relatively late development of the China Securities Market,the corresponding institutional system is not perfect compared to European and American countries.It was not until January2019 that the China Securities Regulatory Commission officially issued a document to allow companies with special shareholding structures and red-chip companies to go public if they comply with relevant regulations.So far,there have been few case studies on special voting rights arrangements for A-share companies in the Chinese academic circles.Most of them focus on the research of system construction and mechanism of action.Against the backdrop above,this paper selects Ucloud,a company that has firstly carried out special voting rights arrangement and was listed on A-shares since the document as the target of case study.By virtue of data corroboration and analysis,this paper believes that the strong psychological proprietary and control needs of the founders of Ucloud、the threat of external acquisition and the financing needs for the development of company are the fundamental reasons for its special voting rights arrangement;the mechanism of economic outcomes of its special voting rights arrangement is to play a role in three ways:promoting the efficiency of corporate governance,exerting the technical management ability of the founder,and strengthening the innovation ability of the enterprise;the economic consequences of the special voting rights arrangement of Ucloud are to strengthen the short-term market response,affect the company’s financial performance,reduce agency costs and facilitate equity refinancing.Finally,this paper summarizes from three levels: founders,shareholders and enterprises.For founders,the arrangement of special voting rights can maintain their corporate right of control and prevent transformation of control;for shareholders,the arrangement of special voting rights is conducive to reducing agency costs,promoting the corporate financing,and satisfying the diverse requirements of shareholders;for companies,the arrangement of special voting rights will help founders isolate interference from other shareholders,avoid short-sighted behavior,and fulfill the long-term development plan of this enterprise.The CSRC allows companies with special voting rights to go public.On the one hand,it is the intrinsic demand of the enterprises,and on the other hand,it is also the need of market development.However,there are still many areas that can be improved and perfected in the relevant systems of special voting rights arrangements,this paper puts forward targeted suggestions from two aspects: further improving the corporate information disclosure system and strengthening the protection mechanism for the interests of small shareholders from the aspects of sunset clauses and litigation systems.All in all,the special voting rights arrangement of Ucloud is a bold practice.Through a detailed argumentation of the agents,economic consequences and it’s mechanism of special voting rights arrangement,this paper hopes to provide reference for other companies that plan to adopt special voting rights arrangements to list on A-shares and the complement of the special voting rights regime in the China Securities Market.