AJIBM  Vol.9 No.2 , February 2019
The Case Study of Cross-Shareholding between ZHENYE and CHANGCHENG
Abstract: 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 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.
Cite this paper: Liu, J. (2019) The Case Study of Cross-Shareholding between ZHENYE and CHANGCHENG. American Journal of Industrial and Business Management, 9, 342-353. doi: 10.4236/ajibm.2019.92023.

[1]   Chu, Y.Y. and Wang, W.Z. (2001) Thoughts on the First Case of Interactive Shareholding in China. Management World, 5, 173-186

[2]   Pei, G.F. (2008) Thoughts on Cross-Shareholding of Chinese Listed Companies—From the Cross-shareholding in Japan. Social Sciences In Guangdong, 4, 40-44

[3]   Ferguson, R. and Hitzig, N.B. (1993) How to Get Rich Quick Using GAAP. Financial Analysts Journal, 49, 30-34.

[4]   Fang, H.K., Jiang, Z.H. and Wang, Y.K. (2018) Analysis of Cross-shareholding of Listed Companies—Taking Suning and BABA as Examples. Economic Management (Abstract Edition), 5, 358-360.

[5]   La Porta, R., Lopez-De-Silanes, F. and Shleifer, A. (1999) Corporate Ownership around the World. The Journal of Finance, 54, 471-517.

[6]   Jiang, X.Y. (2009) Research on Legal Regulation of Cross-Shareholding in Listed Companies. Shenzhen Stock Exchange Research Institute, Shenzhen.

[7]   Lu, Z.F. and Wang, P. (2013) Horizontal Competition, Earnings Management and Transfer of Controlling Shareholders’ Interests. Journal of Financial Research, 6, 179-192.

[8]   Chen, Q.M. (2014) The Mechanism and Economic Consequences of Cross-Shareholding. Social Sciences Academic Press, Beijing.

[9]   Chu, Y.Y. (2007) Literature Review and Research Outlook on Cross Holding. Journal of Shanghai Lixin University of Commerce, 21, 25-31.