A detailed explanation of the infighting: weak shareholder strong Executive Board

A report letter that directly led to a break in the executive layer detonated the gold group of the listed Companies (600383). SH, hereinafter called Jindi) has accumulated years of power-grabbing battles.　　The end result of the bloody battle, is chairman Linck defends the gold land "the big head" position, his past old friend, the recent rivals, Jindi President Zhang Hua, Shanghai Branch general manager Changhanzhong sadly departed (see this 2010 28th issue "The Golden Land infighting").　　These three people, the same age, the status of approaching, entrepreneurship with the "troika" to promote the growth of gold, but the company has not been able to finish after the expansion, which exposed the lack of Chinese corporate culture and corporate governance deficiencies for the Chinese company Mirror. In the long battle of the seizure of power, the gold is scarred: a large number of senior staff loss, loss of corporate culture, the pace of progress slowed, poor sales, the first half of this year's total sales of only 5.5 billion yuan, has lagged far behind the real estate First Army. The gold land listed in the market is still beset by the disadvantages of the governance mechanism, which is alarming.　　　　Whether the new power pattern of the post-war period has opened up the new glory of gold is still challenging. The rupture of the "prosecution letter" began in 2007 with the contradictions of the golden Land executives, and finally entered the decisive battle in the June 20 this year.　　The battle to seize power from the start to the end, only a few days, but has long been brewing. June 20, King of the fifth session of the Board of Directors of the 51st meeting, the agenda is to discuss a senior vice president, Shanghai Branch general manager Changhanzhong's anonymous report letter.　　The letter was signed as an employee of the Shanghai Golden Land and was correctly sent to all directors except Changhanzhong. Kim's fortune in Shenzhen, the headquarters is also located in Shenzhen. Traditionally, boards are usually arranged in Shenzhen, with only one exception in history. But the board is not only scheduled for Sunday 10 o'clock in the morning, it is also located in Shanghai. A person familiar with the matter said the Board had neither informed nor informed the agenda in advance.　　The evening before the night to inform the Executive meeting, and then notify the next morning in Shanghai to convene an emergency board. On the same day, a number of management board members are not in Shanghai, can only telephone lines, or entrust other board members to do.　　President Zhang Hua in the field, the main parties Changhanzhong in Shenzhen headquarters, hoping to seek the understanding and support of the main shareholder, the two people hurried to fly back to Shanghai the first flight, still late. This may not be a concern if it is not a special agenda. Golden land on April 12, a board of directors, is the video link, the opening of Beijing, Shanghai and Wuhan branch venues.　　Four directors who fail to attend the meeting in person are entrusted to attend the meeting and exercise their right to vote. But the June 20 meeting was a different matter. According to the people briefed on the above, the meeting explored the Changhanzhong of the golden Land of the old minister of anonymity, citing a number of counts, including poor operating performance, one of the most critical, pointing to Changhanzhong in violation of company regulations, privately developed Ningbo Xiangshan Real Estate project. This matter is very serious, as is known to all, Zhao Sho's Shanghai branch has contributed more than 40% to the gold land performance.　　Chairman Linck was very excited at that time, shouted Zhao must resign immediately.　　A person close to the board said Linck even said that if Zhaobu resigned, the matter would be transferred to the Justice Department. Anxious to rush to the scene of the Changhanzhong defy, that he did not make a big mistake, even if there is an irregular place, "correct the line."　　But except for Zhao, Wang Peizhou and Zhang Hua opposed to resign, most of the other directors chose to support Linck. 　　This board, from 10 o'clock in the morning to 15 o'clock, a full four hours, noisy, "we have to tear off the skin, what words are said, very straightforward and hurt feelings." In business rules, it turns out, there is little affection. The end result, supervisor long Wang Peizhou in three days after angrily quit.　　One weeks later, Changhanzhong was urged to submit a resignation letter, Zhao's supporters Zhang Hua outline also disheartened Ching and go. "Wang Peizhou is the gas to walk, Changhanzhong is driven away, Zhang Hua is squeezed away." A person close to the matter said, "It is surprising that the people who have been in the gold for more than 10 years have been thrown out in this way." "Xiangshan the Xiangshan project in the operating procedures of the irregularities, as a result of the Changhanzhong out and then rip the Gold Team key." However, in the people familiar with the Jindi, this is only the golden high level of contradictions for many years the fuse. "This could have been big and small," said the insider, "a good excuse for waging war." "As early as Changhanzhong leave, the rumor is that he has bought a piece of land in Ningbo Xiangshan, ready to develop their own."　　In the face of this newspaper reporter's inquiry, Zhao did not put it. According to the Ministry of Land and Resources website information, Xiangshan project named "Xiangshan Jin Miao Real Estate Development Co., Ltd. Residential building", located in Danyang Road and Valley Road intersection northwest corner and southwest corner,　　The total area of 5.8571 hectares, for the government listed transfer, the land price is 441 million yuan, the right to use people is Xiangshan Jin Miao Real Estate Development Co., Ltd. (hereinafter referred to as Miao), agreed to the time for December 31, 2009, the contract signed date is March 9, 2010. A person close to the Golden Land Board said the project was "Zhao's scar". Zhao presided over the Golden Land Shanghai Branch, has been bidding on Xiangshan projects in the early work of a lot of investment, and with the Xiangshan government has promised, "if Zhao did not bid, can not step down." "What is the case, when the Shanghai branch in October 2009 to the Gold Group to report the project, the group has used up the amount of investment in the year, do not agree to take the land, because the real estate market change rapidly, can not make a commitment to the future."　　At the same time, the "dare to say dare to do" Changhanzhong organized and launched the Golden Land Shanghai branch of more than 100 employees, through the trust plan to raise money to buy the land. This trust plan is called "Sino-Rong-Lu Hong 1th, Equity Investment Collection Fund Trust plan", the establishment of the time is March 12, 2010, the capital scale of 400 million yuan, its use is to let Lu Hong company 99.11% stake in Ningbo Xiangshan project development. The priority beneficiaries are 200 million yuan, raised by the Sino-Financial Trust;Yi people capital of 200 million yuan, by the Shanghai Heron Miao Investment Co., Ltd. (hereinafter called Heron Miao) subscription, people familiar with the matter, the 200 million yuan that is from Shanghai gold to the staff of the fund-raising, many people through the home mortgage loans to invest, the general staff capital of hundreds of thousands of yuan. Changhanzhong's equity relationship with the project is complex, and its share of funding is a mystery. Miao is the land use right person of the project, the registered capital is about 400 million yuan.　　The shareholders are Lu Miao and Zhong Rong International Trust Limited (IE Trust program), respectively holding 0.9112% and 99.0888%. The trust program shows that after the end of the trust program, its ownership will be all of the Heron's shareholders Lulu Company and Taifeng Company. Lulu Hong Company that is Shanghai Lu Hong Investment Center, Paid-in Capital of about 200 million yuan, for the limited partnership.　　The limited partners are mainly suppliers and contractors and other related persons who have a long term relationship with the Golden Land Company, while the general partner is the Shanghai far-distance Investment Management Co., Ltd. (hereinafter known as the investment). From the nature of the view, the distance investment should be a private investment management company, the company general manager Ye Feng, deputy general manager Chen Daore also served in gold, Changhanzhong as the general investment Adviser. When the trust plan was set up, Zhao was still an executive of the Golden Land.　　Miao, Lu Miao and Lu Hong's legal representative or the executive partner are Zhu, an employee of Shanghai, who has now resigned. It is worth pondering that the trust plan did not exclude the golden land of Shanghai. The proposal shows that the Xiangshan project company has a board of directors, consisting of three persons, one of whom is nominated by Shanghai Heron or Tai Fung, one nominated by King Shanghai and one by the Sino-Financial Trust. At the same time, by the Golden Land Shanghai Branch is responsible for the project development process management and brand operation. It is understood that the project has been started. "Start piling up."　　"A person in charge said she claimed to be a gold employee." Thus, although the Ningbo Xiangshan project and the Golden Land without equity relationship, Zhao, etc. as a trustee, from the law does not have to disclose, but this winding way of taking the land, may not have had prior discussions with the group. A person familiar with the insider said that Zhao had known the gold to the decision-making level, he was quite sentimental, "Zhao Qi not to do so, may just be a procedural error." If he doesn't admit, it's hard to find out. "Whether the Changhanzhong is guilty or not, there is a debate inside the board and there is no conclusion." According to the relevant provisions of the company law, the controlling shareholder, the actual controller, the director, the supervisor and the senior management shall not use the related relationship to damage the interests of the company. If a breach of the provisions of the preceding paragraph causes losses to the company, it shall be liable for compensation.　　When the actions of directors or senior managers impair the interests of the company, the directors and senior managers are required to rectify them. "Compliance is a big problem affecting the future corporate governance of Chinese companies," said one of the voting directors. Chinese companies tend not to take a lot of rules seriously, and always think it's trivial. "Another senior lawyer argued that Changhanzhong's move violated the rule that executives in company law could not compete in the same trade. But the law does not stipulate the need to leave the officeActing。 In the Golden Land Board, the support of the Changhanzhong opinion that Zhao is contrary to the law and Company regulations, but the situation is not bad, and not unauthorized, and the past credit to the obvious, should be corrected and leniently.　　　　But this opinion was not supported by most of the directors, and the board finally made the decision to break the wrist.　　The dispute over the management of the Xiangshan project exposed the "compliance" problem within the gold, while the internal contradictions of the anonymous letter detonated more far-reaching. The origins of the contradictions still need to return to the land of the real estate company's most important business behavior. 2007 years to invest 16.1 billion yuan to take the land, of which Guangdong Panyu, Shenzhen Shang Tang Road, Wuhan Beijing-Han Road and in Tianjin, Hangzhou, the plots are high prices. Since then, the property market has been hit by 2008 years of control. Guangdong Panyu Block Retreat, the other three projects in 2008, a total of 350 million yuan in the inventory price of the preparation, affecting net profit of 329 million yuan.　　2008, not only did not take a piece of land, but also in the weak city to seize the promotion to return funds, reduce profitability. "This has never been seen in the history of gold and has not been seen in any of the previous real estate cycles, our lowest yield was close to 16%, and 16% per cent was our internal rate of return," he said.　　"One of the top executives at Kim said. Who is responsible for the high price? In the golden Land, the investment decision is made mainly by Chairman Linck, President Zhang Hua and Financial controller Huang Junchan three people. In 2007, "Linck Some were pushed by the market, at that time, such as Shanghai branch of a lot of impulse, Linck in decision-making some passive, Zhang Hua is not advocating in such a hot market to take high prices." "Huang Junchan, while having reservations about some of the items, prefers to support Linck," said one insider.　　"Take the decision to report to the Board of Directors, there is no specific discussion on the project, nor have been rejected, more like a" walking procedure. However, as a listed company, the Golden land must be accountable and reflect on the error of decision-making. In the 2009, Kim began to want to reform, the first is to standardize investment decision-making process, the second is to clarify the right to appoint and remove, standardize and form normative documents.　　"A person close to the Golden Land Board believes that the land has done a good job for 2009 years and has not taken a high price since September." But the normative documents of the key process are not coming out. From this newspaper reporter from a number of people familiar with the situation, the decision-making level on how to standardize the process of disagreement. There is, for example, a debate about whether to delegate some of the investment decisions to a branch, and there is a lot of controversy about the right to appoint and remove.　　This involves the delicate power division of the three-person decision-making committee. The Charter of the Company expressly stipulates that middle-level cadres, including branch offices and departmental managers, should be appointed to the president's hands, but according to people familiar with the matter, "all along, the documents for the appointment and removal of personnel are issued by Linck." Linck in an interview with this newspaper once bluntly: "I am chairman, but also CEO, I lead the management team to run the company." I am still the legal representative, the responsibility is more important. "This identity does not have anyWhat legal documents support, but close to Linck people said that although the company did not appoint Linck is the CEO, but has always been Linck in the management company, is a full-time chairman, is also a member of the management team, "the executive meeting has always been presided over by the general."　　Obviously, the change will directly touch Linck power. As the chairman of the Linck, and Zhang Hua, Changhanzhong and called the Golden Land "troika", mutual cooperation has been more than 10 years of history.　　Ling first into the golden land, Zhao and Ling both the villagers and alumni friendship, Zhang is the United States State University of New York Buffalo Management Institute of Business Administration (MBA), senior economist, that year to the status of returnees, one to gold has been a very high starting point. The three are also similar, Linck since 1998 to take over the chairman, this year only 51 years old, Zhang Hua 48 years old, Changhanzhong 53 years old, are at the peak of the career. Three-male partners, both have a strong and delicate relationship.　　Close to Linck, the gold people frankly, later, Ling and Zhang both want their own in charge, two people appeared role conflict. At the board level, although Linck by the first major shareholder nominated as chairman, but with the company's two shareholder Shenzhen Futian Construction Co., Ltd. (hereinafter called Fukuda Construction) more closely related.　　Fukuda Construction is the long-term cooperation of the builders, has entered the shares of the XI ' an project, very much hope that the company has more say. President Zhang Hua is more of the largest shareholder, Futian District government. Changhanzhong in this internal reform to support Zhang Hua outline. "It's the two-year relationship that's getting better," he said.　　"said a number of people familiar with the matter. At the beginning of 2009, Linck had wanted to transfer Zhang's investment and personnel rights to Huang Junchan because of the failure of major shareholder involvement. But in the April 30 of this year, support Zhang Hua Fukuda district Secretary Li Ping for alleged disciplinary investigation. Zhang thus lost strong aid, disheartened under have to go to Italy.　　Zhao's forced dismissal may make Zhang more dependent sense, speeding up Zhang's departure. In this internal struggle for competition, the Board's actual coordination and decision-making role is limited. In fact, within the golden Land, the golden land, despite the dozens of-year board of Directors, was considered by the Board of directors, but it was mostly a formality and the board was rather weak.　　This is related to Jindi's history, ownership structure and company design. The ownership structure of the golden land is extremely dispersed, and the largest shareholder of the state-owned background has only a 7.85% equity stake and is not the ultimate shareholder in place of ownership.　　Gold from a small business development and growth mainly rely on senior management for many years to fight, and thus formed a "weak shareholders, strong executive" situation. To prevent a hostile takeover, to allow management to maintain decision-making power, in 2006, the company also revised the Articles of Incorporation-"The shareholders who are alone or in total holding more than 10% of the company and holding the time of more than one year, and more than four directors of the previous board may nominate the next board of directors as a non-executive candidate."　　None of the shareholders of the Golden Land met this condition, and the authority to nominate new directors fell into the hands of the old directors. The aim of this design is to "protect the original shareholders and directors because the original board is not easy to reorganize, the newShareholders are hard to get into the board. " He said the spread of equity is widespread abroad, but they "will not design such a high nomination conditions."　　Unless the Constitution is amended, it would also mean nominating a director if it can be changed. This explains, to some extent, the continuing stability of senior management and the actual control of the board by powerful executives.　　　　But the problem at the same time is that disagreements between executives are not discussed and eradicated through the board. Injured Golden Land "the company is very powerful, but not early reflection, early resolution, so that the impact of the company's development." One of the directors of the Golden land was rather sentimental. The aforementioned emergency board also surprised the lone directors.　　As independent directors, they should ask the company to investigate the problem, or they will assume responsibility, and understand that the public is clearly damaging to the company's image. But the damage to the company from the power of the executive's seizure is more than the image. The first half of the Gold Group sales amount of 5.5 billion yuan, only completed the annual plan of One-fourth, the industry ranked down to 20. And lost the manager of the Golden Land Shanghai Company, rumors around, said the group intends to Shanghai branch "Big Shuffle": "The People headquarters want, six months ago transferred to other cities, the remainder is ' death penalty ', we are waiting for ' death penalty '. "The gold land is a very good company," says one employee who left Jindi two or three years ago. No matter who is wrong with WHO, anyway is the company to make a half-life, (Linck, Zhang Hua) both people are wrong. "There is an old slogan, the talent is gold, the mind is the ground, now gold and land are all messed up."　　"The above staff pointed out that Jindi also has a slogan is" Looking for more people to find the land, tree trees to the building, "these embodies the tolerant, flexible governance mechanism of the pursuit," Now it seems, is also a thing of the past. " So far, the old man has gone, with the Linck of his younger partner--the new president, Huang Junchan, less than 40 years old--and the company's management back to stability, with the board needing additional directors.　　On July 5, Linck in the media conference, said the matter will not cause a very significant impact on the company, will not lead to corporate culture, values and major strategic changes.　　Golden Land, a branch of the boss also said that the first half of the poor sales because the push is very small, the second half will have nearly 2 million square meters of new disk launched next year, the sale of larger, so the two-year performance growth is guaranteed. However, one analyst said: "The market is not good, the golden land this year to complete 21 billion yuan sales target has a lot of pressure, 15 billion-16 billion yuan is more realistic, many companies have to hit 80 percent."　　However, many members of the Golden Land Board think that the outbreak of conflicts is not necessarily a "good thing", because the infighting must be resolved. However, some legal people believe that in the senior management dispute, Changhanzhong and Zhang Hua have in the company's investment decisions, the appointment and dismissal of different views, in essence, the role of power checks and balances, which is crucial to the gold. Professional judgment on the industry cycle is a matter of life and death for real estate companies, lack of checks and balancesMechanism companies are more prone to systemic risk.