Mar 13, 2021 05:49 AM

Billionaire Zhang Jindong Remains’s Top Shareholder

Zhang Jindong, chairman and CEO of
Zhang Jindong, chairman and CEO of

Zhang Jindong, the billionaire founder of Electronics retailer Co. Ltd. (002024.SZ), remains the company’s largest shareholder through an alliance after a state-led bailout, the struggling retailer said Friday.

In the bailout, Zhang and three of the other largest shareholders sold a combined 23% of the company’s shares to two state-owned investment entities in Shenzhen for 14.8 billion yuan ($2.3 billion), according to a filing with the Shenzhen Stock Exchange.

After the sale, Zhang’s stake in the company decreased to 16.38% from 24.94%. But he formed an entities-acting-in-concert alliance with parent company Suning Appliance Group Co. Ltd., according to a letter to the Shenzhen Stock Exchange sent Friday night. Suning Appliance’s stake decreased to 5.45% from 16.8%, but the alliance gives Zhang control of 21.83% of the voting power.

The alliance effectively leaves Zhang with significant sway over the company he founded 30 years ago even after surrendering a large chunk as part of a rescue led by the Shenzhen government. The Nanjing-based retailer faces mounting pressures amid lackluster financial performance. In the absence of a controlling shareholder, the new ownership structure will play a role in determining which shareholders are entitled to fill how many of the company’s nine board seats.

Currently, Zhang and members nominated by him and Suning Appliance together occupy four seats. Taobao (China) Software Co. Ltd, a unit of e-commerce giant Alibaba Group Holding Ltd. with a 19.99% stake, holds two seats. Three independent directors are from academia.

In the future, the two state-owned shareholders might fill three seats on the board, and Taobao will retain two seats, leaving three seats to Zhang and his alliance, with one independent director, according to a senior executive at

The two state-owned investment groups—Shenzhen International Holding Ltd. and Shenzhen Kunpeng Equity Investment Management Co. Ltd.—are both controlled by the Shenzhen government’s State-owned Assets Supervision and Administration Commission (SASAC). If they act in concert, they could create an entity that would be the largest shareholder with 23%, some people with knowledge of the situation said.

Shenzhen International Holding, a logistics and toll road operator, said in a statement that the investment in could create strong synergies in logistics and project expansion, allowing it to make use of the retailer’s logistics resources and accelerate the national layout of comprehensive logistics ports.

The Shenzhen Stock Exchange asked that the company clarify the matter. In response, Suning said the two state-owned shareholders are not acting in concert as there is no shareholding control relationship between them and they didn’t sign an agreement to act in concert.

The Shenzhen Stock Exchange raised a concern about whether the absence of a controlling shareholder will have adverse effects on’s daily operations and governance. The company responded that the top biggest shareholders actively support the development of the company’s online retail business and won’t adversely affect the company’s daily operations.

In the first three quarters of last year,’s net profit fell by 95% to 547 million yuan. The retail giant, operating one of the country’s biggest chains of stores, has a strong presence in online and offline retailing nationwide.

Despite years of effort, has yet to make a major dent in the Chinese e-commerce market and now ranks a distant fourth with 5% or less of the market. As of the end of September, the company closed more than a quarter of its brick-and-mortar stores as more Chinese consumers shopped online.

Contact reporter Denise Jia ( and editor Bob Simison (

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