Publications
Publications
- February 2011 (Revised June 2011)
- HBS Case Collection
Stock Reform of Shenzhen Development Bank
By: Li Jin, Li Liao, Aldo Sesia and Jianyi Wu
Abstract
Shenzhen Development Bank, China's first publicly traded company, was undergoing the non-tradable share reform. Its current controlling shareholder, private equity firm Newbridge Capital LLC, needs to negotiate with its diverse minority shareholders to find a compromise on the terms of the conversion of the non-tradable shares held by Newbridge into tradable shares. Further delay in implementing this reform will put Shenzhen Development Bank into jeopardy as the bank will not be allowed to raise the additional capital it very much needed, but the negotiation 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, and the fiduciary duty of corporate managers in an emerging market.
Keywords
Capital; Private Equity; Investment; Corporate Governance; Managerial Roles; Emerging Markets; Negotiation; Business and Shareholder Relations; Conflict of Interests; Banking Industry; China
Citation
Jin, Li, Li Liao, Aldo Sesia, and Jianyi Wu. "Stock Reform of Shenzhen Development Bank." Harvard Business School Case 211-080, February 2011. (Revised June 2011.)