Shanda Games Privatization Consortium has changed 7 management appointments in 2 years and is questioned

Since January 2014, Shanda Games has undergone seven privatization consortium changes. After the sixth consortium change, nine major shareholder platforms were formed, which in turn belonged to three major factions, namely Zhongrong Group, Century Huatong and Shanda Management.

Original title: Shanda Games 'internal strife affects management

Since the completion of the privatization and delisting transaction in November last year, conflicts among Shanda Games shareholders have repeatedly become the focus of the industry. First, the two major shareholders, Zhongrong Group, and the gravel fund, fought fiercely because they could use Shanda Games 'backdoor target. Then, Shanda Games management team transferred its shares to Yintai's holding company, making the equity dispute even more intense. Nowadays, even the management team that is far away from equity disputes has not been spared from the tussle of new capital. Although Xie Fei, the new CEO of Shanda Games, vowed to end Shanda Games '"capital series" when he took office, it seems that this "series" is still far from the end of the drama.

Black sunglasses, black T-shirt, and black pants, many "black people" have recently appeared at Shanda Games headquarters located in Building 1, No. 690 Bibo Road. These "black people" have replaced the original security guards of Shanda Games. Almost simultaneously with this was the change of Shanda Games management.

On June 28, Xie Fei, the new CEO (CEO) of Shanda Games, issued a personnel appointment, appointing Tan Yanfeng as the company's vice president, responsible for market communications and other work, and said that many former graduates of Shanda Games have returned to senior management positions. This proves that although the background of shareholders has changed several times, the "Shanda System" still plays a mainstay role in Shanda Games's corporate operations.

Prior to this, media reports said that only a month after Xie Fei became the new CEO of Shanda Games, veteran "Shanda" CFO (Chief Financial Officer) Yao Li and CAO (Chief Administrative Officer) Zhang Jin were dismissed on the spot.

On June 29, a person close to Shanda Games confirmed to reporters that Yao Li, Zhang Jin and Vice President Zhu Xiaojing had indeed left. Among them, Zhu Xiaojing resigned voluntarily, while Yao Li and Zhang Jin were "dismissed". The specific method was similar to the rumors,"they were forcibly taken out of the office."

Obviously, with the entry of the Yintai system, the originally bumpy road to privatization of Shanda Games has become more and more bumpy, and the struggle at the capital level has already harmed the management.

The "Chen Tianqiao System" was purged

Although Xie Fei boldly promised to end Shanda Games's "capital drama" at the beginning of his appointment, the "turmoil" should have come to an end. But looking at it now, this "series" is still far from over.

It is understood that Zhongrong Group became a member of Shanda Games Consortium in September 2014. Even though it had the actual controlling stake in Shanda Games, it had no intention of replacing the original senior management of Shanda Games. Until the Yintai Group parachuted, the original pattern was completely disrupted.

After obtaining 9.02% of Shanda Games shares and 34.38% of voting rights, on April 29 this year, Shen Guojun, founder and chairman of Yintai Group, directly appointed Xie Fei as CEO of Shanda Games.

On June 25, it was reported that only one month after Xie Fei became CEO, Yao Li and Zhang Jin were dismissed on the spot, and the office was even sealed. On June 23, Shanda Games just confirmed that Zhu Xiaojing, the company's vice president, would leave in the near future.

It is worth noting that Yao Li, Zhang Jin, and Zhu Xiaojing are members of the Chen Tianqiao family of CEO of Shanda Group. In other words, no one in Chen Tianqiao family has been spared and eliminated.

Data shows that Zhu Xiaojing has joined Shanda since 1999. In 2009, after Shanda Games was spun off and listed, he joined Shanda Games and was transferred to the "Tower of Eternity" project team in October of that year, serving as a marketing manager and then as a general project leader and other positions. At the end of 2014, Zhu Xiaojing was promoted to vice president of Shanda Games, in charge of public relations, marketing and other work.

Zhang Jin joined Shanda in 2009. Since May 2011, he has served as senior vice president of Shanda Networks Group, in charge of the company's external communication and human resources-related work. He is the spokesperson of Shanda Group and once served as vice president of human resources of Shanda Group. In November 2014, Zhang Jin was appointed chief administrative officer of Shanda Games, in charge of and coordinating non-business internal management support work.

Yao Li joined Shanda Group in 2007. As the group senior vice president in charge of finance, he once served as a director and chief financial officer of Actoz Soft, and has served as a director of Shanda Games since March 2013. In April 2015, he was promoted to Chief Financial Officer of Shanda Games.

Cai Ling, a cultural industry researcher at China Investment Consulting, said in an interview with reporters that these eliminated executives are the mainstay of Shanda Games. After the violent turmoil at the senior management level, Shanda Games is "greatly damaged" and its business operations are bound to encounter big challenges.

However, Xie Fei does not agree with the statement of "cleansing". On June 28, Xie Fei issued a new personnel appointment, appointing Tan Yanfeng to replace Zhu Xiaojing as the company's vice president, responsible for marketing communications and other work. He also said that many former Shanda Games people have returned to senior management positions, proving that although the shareholder background has changed several times, the "Shanda System" still plays a mainstay role in Shanda Games's corporate operations.

It is understood that Tan Yanfeng, who returned this time, served as product manager of DOA project and marketing director of Hanshi Studio at Shanda Games from 2007 to 2013. At present, in addition to Tan Yanfeng, Chen Haojian, known as the "Father of Legends", has also returned to serve as the producer of Legendary Studio; Tang Yanwen, who created "The Legend of Hot Blood Mobile Edition", is also on the return list, leading the new group of Hot Blood Studio; Cai Wei, the original person in charge of "Legendary World", returned and established Chongde Studio with his rich experience in running Haofang Online, opening the road of e-sports for Shanda Games with the legendary MOBA.

Some analysts analyzed in an interview with reporters that the purpose of the newly appointed Tan Yanfeng and other old "Shanda" returning is actually very clear, which is to stabilize the military's morale. "Yintai directly appointed a new CEO without consulting with Zhongrong Group and made major adjustments to the management. Recalling the 'Old Shanda Department' hopes to stabilize the wavering military morale, offset the negative psychology of internal and external personnel caused by previous management turmoil, and at the same time achieve the goal of smoothly controlling Shanda Games."

The appointment of management was questioned

and the changes in management made the major shareholder Zhongrong Group unable to sit still.

On the morning of June 24, Zhongrong Group questioned the legitimacy of Yintai Group Chairman Shen Guojun's direct appointment of Xie Fei as the CEO of Shanda Games, and issued a statement in the "Open Letter to the Existing Management of Shanda Games" issued saying that without the unanimous consent of all Shanda Games investors, no person or affiliated company has the right to appoint or replace senior management personnel of Shanda Games or change the responsibilities and authority of senior management. Before all Shanda Games investors decide on a new CEO through consultation, other existing senior executives of Shanda Games should follow the original management structure. Shanda Games 'management personnel and related situations should remain the status quo.

Zhongrong Group said that the news was learned based on media reports, and no relevant person had notified Zhongrong Group before.

Zhongrong Group also pointed out that Shanda Games (Cayman), as one of Shanda Games subsidiaries, has no right to appoint any senior management personnel of Shanda Games, and Shen Guojun has no right to appoint Xie Fei as CEO of Shanda Games. Zhongrong Group will hold the parties concerned responsible for the losses caused by Xie Fei's invalid authorization at Shanda Games.

On the afternoon of June 24, in response to the statement issued by Zhongrong, the board of directors of Shanda Games immediately issued an open letter to all employees, pointing out that on May 13 and May 16, the board of directors of Shanda Games agreed and signed the relevant appointment. According to Cayman law, the appointment is true and effective.

Data shows that Xie Fei holds a master's degree in business administration from the University of Kent in the UK. He served as vice president of China Digital Media Network Co., Ltd. He has rich management and operation experience in the field of new media business. He also served as a venture capital partnership focusing on TMT. Vice President of the company.

Reporters

found out that since January 2014, Shanda Games has undergone seven changes to the privatization consortium. After the sixth consortium change, nine major shareholder platforms were formed, which in turn belonged to three major factions, namely Zhongrong Group, Century Huatong and Shanda Management.

In May of this year, Shanda Games management announced that all shares and voting rights held by Ningxia Yilida had been sold to JW HOLDINGS CAYMAN LP (hereinafter referred to as "JW"), a subsidiary of Yintai Group. This was also the latest privatization consortium change for Shanda Games.

As of now, Zhongrong Group owns 41.19% of Shanda Games 'total shares and 46.66% of the total voting rights. Century Huatong holds 43% of the equity and slightly more than 16% of voting rights. Yintai Group holds 9% equity and 34.5% voting rights.

Cai Ling believes that Ningxia Yilida transferred its equity to Yintai Group mainly to balance the interests of Zhongrong Group and Century Huatong and accelerate the privatization process of Shanda Games. "Because Zhongrong Group and Century Huatong, as the two major shareholders of Shanda Games, had conflicts due to different interests during the process of privatization and return to A-shares, the privatization of Shanda Games has reached a deadlock. The introduction of Yintai Group will help break the deadlock."

However, Yilida's "kindness" made the major shareholder Zhongrong Group very dissatisfied. Its announcement shows that Zhongrong Group had signed a letter of commitment with Zhang Yingfeng, director and co-CEO of Shanda Games, promising that without the consent of Zhongrong Group, Zhang Yingfeng, Yingfeng Investment and Yilida should promote and ensure that Yili Shengda shall not directly or indirectly transfer its shares in Shanda Games to a third party. In April this year, Yilida transferred its entire equity in Yili Shengda to JW, a subsidiary of Yintai Group, and announced the news in May.

For the reason of violating its promise, on June 12, Zhongrong Group announced that it had sued Ningxia Yilida, Shanghai Yingfeng Investment and Zhang Yingfeng to the Yinchuan Intermediate People's Court of Ningxia Hui Autonomous Region, and applied to add JW as a third party, requesting that the transaction be ruled invalid. The Yinchuan Intermediate People's Court of Ningxia Hui Autonomous Region accepted the case on June 8, 2016.

According to public information, Ningxia Yilida was established in November 2014, with a total of 26 shareholders, including Shanghai Yingfeng Investment. Most of the actual shareholders are the internal management of Shanda Games. Among them, Shanghai Yingfeng Investment is a company wholly owned by Zhang Yingfeng and is the legal representative of Ningxia Yilida.

Some industry insiders analyzed that if the deal is ruled invalid, Zhang Yingfeng and Shanghai Yingfeng may want to buy back their shares, and Shanda Games privatization consortium will face another change of fate.

On June 24, Zhang Yingfeng denied this letter of commitment. Shanghai City Jintiancheng Law Firm accepted Zhang Yingfeng's entrustment and issued a lawyer's statement in response to the "Letter of Commitment" stating that Zhang Yingfeng had never signed the "Letter of Commitment" and learned that China Rongrong Group had filed a lawsuit with the relevant court, but it has not yet received the court litigation materials.

In Cai Ling's view, Shanda Games's current difficulties have certain implications for other listed companies. "When the equity ratios among the company's major shareholders are quite close and the equity ratios of other minority shareholders are extremely low, it is easy to form a shareholder deadlock in this situation. A reasonable equity structure is that it cannot be too concentrated or too dispersed. It is more appropriate for the shareholding ratio of major shareholders to be around 25%."

Tang Yuejun, associate professor at the Department of Business Administration at the School of Management at Fudan University, told reporters that equity disputes have occurred frequently recently, and the governance of shareholders and boards of directors should be systematically reflected. If corporate governance is to be sustainable, careful institutional arrangements must be made.

Editor: Nancy