The Case Study of Cross-Shareholding between ZHENYE and CHANGCHENG

Jialing Liu
2019 American Journal of Industrial and Business Management  
The phenomenon of cross-shareholding in China was formed in the 1990s. Domestic and foreign scholars have studied the motives and effects of the formation of cross-shareholding system, but there are few specific case studies, especially the cross-shareholding formed by the government. Therefore, this paper will study the cross-shareholding case. Shenzhen Zhenye (Group) Co., Ltd. ("ZHENYE" for short) and Shenzhen Changcheng Investment Holding Co., Ltd. ("CHANGCHENG" for short) held each other's
more » ... held each other's shares from 1995 to 2013, which lasted 18 years. This cross-shareholdings relationship promoted by the government brought both positive and negative effects to ZHENYE. This article analyzes the effects to ZHENYE and give suggestions to the cross-shareholdings companies: 1) in order to prevent hostile takeover, the cross-shareholdings companies should consider the percentage of cross-shareholdings or cooperate with more than one company; 2) making an alliance with other companies will benefit the long-term development of the company; 3) cross-shareholdings can be a new way of transformation of the state-owned enterprises.
doi:10.4236/ajibm.2019.92023 fatcat:cks355mz4fdehlcrccfonmf7wq