The first publicly traded company in China, Shenzhen Development Bank, was undergoing the non-tradable share reform.
Its present controlling investor, private equity firm Newbridge Capital LLC, needs to negotiate with its diverse minority stockholders to locate a compromise on the terms of the conversion of the non-tradable shares held into tradable shares by Newbridge. Additional delay in implementing this reform will place Shenzhen Development Bank into jeopardy as the bank will not be permitted to raise the additional capital it needed, but the dialogue between Newbridge and other shareholders was breaking down.
The case discussed the non-tradable share reform in China, its causes and its implications, and from the perspective of one private equity play, discussed the issues of corporate governance, conflicts of interest, as well as the fiduciary duty of corporate managers in an emergent marketplace.
Stock Reform of Shenzhen Development Bank case study solution
PUBLICATION DATE: February 01, 2011 PRODUCT #: 211080-PDF-ENG
This is just an excerpt. This case is about FINANCE & ACCOUNTING
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