Shenzhen Development Bank, China’s first listed company, which was located in the non-tradable shares reform. Its current majority shareholder, private equity firm Newbridge Capital LLC, must negotiate with its diverse minority shareholders in order to find a compromise on the terms of the conversion of non-tradable shares into tradable shares of Newbridge. Further delays in the implementation of this reform is in jeopardy, as the bank is not allowed to increase Shenzhen Development Bank … Read more »

Shenzhen Development Bank, China’s first listed company, which was located in the non-tradable shares reform. Its current majority shareholder, private equity firm Newbridge Capital LLC, must negotiate with its diverse minority shareholders in order to find a compromise on the terms of the conversion of non-tradable shares into tradable shares of Newbridge. Further delays in the implementation of this reform will bring Shenzhen Development Bank at risk as the bank will not be allowed to raise the additional capital it is very necessary, but negotiations between Newbridge and other shareholders was down. Discussed the case of non-tradable shares reform in China, its causes and its consequences, and from the perspective of a private equity play, discusses the issues of corporate governance, conflict of interest and the duty of care of corporate managers in an emerging market.
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from
Li Jin,
Li Liao,
Aldo Sesia
Wu Jianyi
Source: Harvard Business School
14 pages.
Release Date: 1 February 2011. Prod #: 211080-PDF-ENG
Joint-stock reform of Shenzhen Development Bank HBR case solution