NVC's Dispute: Regardless of Right and Wrong Regarding Contract

A middle-aged entrepreneur, who has repeatedly been deprived of control of foreign capital, asked the master: "Master, I have spent half my life creating a company that is well-intentioned to introduce strategic investors. They always call me control over the company. What?"

The Zen master silently lifted a pot of water and sprinkled rice, corn, and black rice, respectively, and boiled it over the fire without stirring. The middle-aged entrepreneurs suddenly realized, "You mean that I should introduce more capital to achieve checks and balances, right?" The Zen master said: "I am hungry and I have no time to talk with you."

Maybe the Zen Master does not know how to deal with this because he does not know that middle-aged entrepreneurs and foreign capital are right or wrong, nor does he know what contract the two parties have entered into. In fact, the contest between the founder of NVC and Wang Donglei, chairman of BDO Runda, is such a headless case.

From the perspective of entrepreneurs, Wu Changjiang is a typical tragic entrepreneur. In 2005, Wu Changjiang and other founders of NVC Lighting were forced to leave the position of Chairman of the Board of Directors; at the end of 2011, Wu Changjiang and the founding partner of Saifune Asia Fund clanked and resigned from NVC Lighting; currently, Wu Changjiang also broke up with Wang Donglei and the CEO’s position was not guaranteed.

Almost the same bridge staged three times in a row, and Wu Changjiang became the weaker side in the capital war. Unlike the sign wars or even hostile takeovers in the secondary market, Sui and Wang Donglei were allies of Wu Changjiang and they had a period of honeymoon between them.

It can be said that after Wu Changjiang settled his dispute with other founders, he introduced Saifu Asia based on the needs of expansion and listing, which really made NVC Lighting even more powerful. Wu Changjiang, who is the founder, has introduced foreign capital at the expense of equity transfer and equity dilution in order to seek higher commercial returns.

In the same way, Wang Donglei was also the foreign aid requested by Wu Changjiang at a critical time. With the help of Wang Donglei, Wu Changjiang kept his position as CEO. As a price, Wu Changjiang transferred part of the shares of NVC Lighting, and also shares in BDO Runda, becoming its second largest shareholder.

According to BDO Runda's announcement on April 20 this year, Wu Changjiang currently holds a 6.86% stake in NVC lighting, and also once planned to transfer all of the shares to BDO Runda. In other words, in fact, Wu Changjiang has already prepared NVC lighting plans. At least until April 20, BDO Runda is theoretically a major shareholder of NVC Lighting.

However, Wu Changjiang is conditional. That is, he continues to be the CEO of NVC Lighting. Only by keeping his CEO position, Wu Changjiang can further implement his own plan, which may not be consistent with BDO Runda's goals.

So the question arises, after Saifu Asia, BDO Runda and other capital shares, NVC lighting who has the final say? Can these first-largest shareholders be regarded as NVC Lighting's controlling shareholders?

Judging from various disputes, Wu Changjiang may not think that BDO Runda and other capitals are controlling shareholders of NVC. The so-called controlling shareholders should occupy a controlling position in the company's business, strategy, equity, and the board of directors. In particular, they should control the board of directors, otherwise they will only be financial investors with a high proportion of shares.

Is Safari Asia and BDO Runda willing to act as financial investors? Obviously not willing! In the unwilling case, Saifu Asia and BDO Runda took a series of control measures to gather the right to speak, thus forming a substantial impact and weakening the power of Wu Changjiang. Of course, Wu Changjiang is also making concessions, his role is constantly changing, from the founder, the controlling shareholder, the chairman, to the CEO.

Is Saifu Asia and BDO Runda actually controlling NVC Lighting? It seems impossible! Wu Changjiang competed with the aforementioned capital by the founder's role. From the dispute over the position of the board of directors, it eventually caused chaos in the company's business. This was extremely apparent during the confrontation between Wu Changjiang and Yankee.

Looking through the entire process, Wu Changjiang and foreign capitals all tried to control NVC lighting, but they could not do so, and they evolved into a struggle that seemed to be guilty of the outside world. There is no right or wrong, no victory or defeat in this battle. As a result of the struggle, the business of the company continues to be turbulent, and the shareholders’ rights and interests are frustrated as a whole.

Similar cases actually do not stop at NVC Lighting. The root cause is the lack of a contractual spirit. The two sides can form a joint force in the honeymoon period and then quickly become mutual consumption.

Domestic entrepreneurial entrepreneurs often overestimate their ability to control themselves, including their ability to control the capital market. They rely on foreign capital in the process of their growth, but they are reluctant to cause shareholding or loss to the board when they introduce capital. control. However, the rules of the game in the capital market are that capital is king. Entrepreneurial entrepreneurs must be accustomed to the transition from the founder to the professional manager. Otherwise, it is a farce after another.

In the same way, foreign capital should also appropriately converge on its aggressive nature and pursue the principle of win-win. Many times, foreign capital does not have the ability to manage the company better than the founders. Kicking off the founders may not be in line with the principle of maximizing profits. We expect that the capital market will become rational and abide by the contract, and seek a lot of win-win results under reasonable rules.