Reinventing the Millennium

At half past six in the evening, the setting sun was gradually swallowed up by the distant sky.

In a black car driving towards Lujiazui, SMIC CEO Wang Ningguo put down his mobile phone and felt a little relieved. He had just called Mr. Fang and learned that the other party was also about to call him.

This proves that Mr. Fang has no intention of sitting idly by.

Wang Ningguo sighed and lit a cigarette. The shareholders' meeting had ended and the voting results had been released, but he still felt confused about what happened today.

It shouldn't, it shouldn't...

As a CEO who was invited in when SMIC was in turmoil, he believed that he had done his best to do his job, and, to be objective, the results were pretty good.

The past fiscal year 2010 was a year in which SMIC turned a profit and was also the first profitable fiscal year in five years.

Annual sales increased by 45.3%, and the proportion of advanced production capacity revenue increased to 54.5% compared with 47.5% in 2009. The development of 45nm low-power technology is proceeding as scheduled.

This is a year for SMIC to consolidate its foundation, recover steadily, maintain growth, and open up markets.

As for today's shareholders' meeting, various proposals have been communicated in advance. The most important thing is for Zhang Wenyi, invited by Dr. Jiang, to officially serve as a director to complete the personnel replacement of SMIC's board of directors.

As for my board seat...

Will there be any surprises for people who hold multiple important positions such as CEO, president, and executive director of a listed company?

That's how the accident happened.

However, Dr. Jiang passed away only two days ago. Such a turmoil is very disturbing...

Wang Ningguo looked heavy and felt cold.

In the directors' conference calls in the past period, Datang did not raise questions about the board seats. Now, it has chosen to raise the issue at the critical moment when the chairman has passed away and Zhang Wenyi has not yet taken over the position. This has undoubtedly created and expanded SMIC's power. vacuum.

This is not just a matter of not having an executive director, but it sends a strong signal that major shareholders are going to fight for control of the company.

Regardless of the outcome, it will undoubtedly be a turmoil for SMIC, which has many factions.

However, SMIC has only just stabilized in the past year.

The car slowed down and was already very close to Yike's headquarters.

Wang Ningguo looked out the window. He was denied re-election as director, and the major shareholders intervened forcefully. If he, the CEO, wanted to be decent, he would have resigned on his own, but...he came straight to Mr. Fang now because of Dr. Guo Jiang's instructions.

If things are not harmonious, you can seek help from Mr. Fang.

SMIC's equity is dispersed, which has been a problem since its establishment. There are corresponding risks of disputes over management rights. In addition, there have always been different demands. Therefore, Dr. Jiang talked with Wang Ningguo in his last moments. over this problem.

There are both practical and historical reasons for the dispersion of ownership.

There have always been constraints in the mainland's semiconductor industry, with restrictions on purchasing equipment and introducing technology. There have been attempts to go down the route of Huahong and Huajing, but the results have been unsatisfactory.

Therefore, the introduction of overseas capital and indirect support from the mainland was a new attempt, and SMIC came into being under the leadership of Zhang Rujing and others.

Similarly, Ice Core also followed this route to qualify for the start.

Based on this consideration, although Datang did not put forward strong opinions before, Dr. Jiang also proposed the last layer of insurance with CEO Wang Ningguo when considering the future equity issue with SMIC.

Fang Zhuo, SMIC’s fifth largest shareholder.

The top five shareholders of SMIC are Datang, CIC, Taiji, Shencheng Industrial and Fangzhuo.

The company once sought outside investors when it was facing financial difficulties. At that time, Fang Zhuo obtained 5% of the shares, and has not moved on since then. Due to two capital increases from other shareholders, this number was reduced to 4.21%.

At the shareholders' meeting on the 29th, Fang Zhuo's representative voted in favor, but due to the sniper opposition from major shareholders, this vote had no effect.

However, this last layer of insurance does not refer only to the 4.21% shares, but to Fang Zhuo.

As the head of Bingxin and the leader who strongly promotes the integration and progress of mainland industries, he has the energy to change the situation and also has rich experience and means of struggle. This has been verified many times.

When Wang Ningguo walked into the gate of Yike, Dr. Jiang's tired voice seemed to echo in his heart.

——"If there really is a situation, go to him. He can do anything. When the time comes, no matter what he does, you will accept it."

They all admitted it.

At this moment, Wang Ningguo had to accept the voting results at the shareholders' meeting, and he could leave or stay, but he still had to take out the last layer of insurance, because even if he accepted it, someone would definitely not recognize.

The elevator goes up and freezes at 23.

This is Wang Ningguo's first visit to Yike's headquarters, and a conference room has been prepared here.

However, when he was introduced into the conference room and saw the two people present, he couldn't help but be stunned.

"Mr. Zhang, Mr. Zeng."

Zhang Wenyi and Zeng Zonglin.

One has just officially become a director of SMIC today, and the other is the company's chief financial officer. They are already sitting in Yike's conference room.

Wang Ningguo looked at these two people with mixed emotions. After a few seconds, he asked: "You guys, why are you so fast?"

"We came by subway." Zhang Wenyi replied.

He happened to meet Zeng Zonglin at the subway station, and they came together hand in hand.

Wang Ningguo sat down, sighed, and said no more.

Zeng Zonglin is from Baodao. She has always had a good relationship with Wang Ningguo during this period. She said: "There are still people who haven't come. Mr. Fang is calling in the office and will come over later."

Wang Ningguo nodded silently.

Soon, SMIC executives were welcomed into the conference room one after another. Most of them had just separated from the shareholders' meeting, but now they meet here again.

The atmosphere is both heavy and subtle.

At 6:30 p.m., Fang Zhuo walked into the conference room, glanced at everyone present, nodded, and said: "I heard that SMIC has changed, so I have to take the trouble to come over and let me understand the situation."

When he said this, the anger in his heart was still unabated, and he couldn't help but sneer: "Well, what is going on in this conference?"

The nine senior executives of SMIC, including the directors, CEO, CFO, and CMO, looked at each other. In the end, it was Wang Ningguo who answered this question.

Today's shareholders' meeting did not change the agenda. Although Dr. Jiang passed away, the meeting was still held according to the original plan.

Therefore, only Zhang Wenyi's director nomination was approved, but a new chairman was not elected.

As for Wang Ningguo’s vote...

Datang voted against the decision simply because it believed Wang Ningguo was not suitable to be elected as a director.

Not all shareholders must be present at the shareholders' meeting. SMIC's shareholdings are dispersed and many small shareholders never come to the meeting. This time, SMIC's shareholders, who together account for 47.59% of the total share capital, were present.

According to regulations, the proposal must be approved by more than half of the voting rights present at the shareholders' meeting. That is, if the resolution to elect Wang Ningguo as director is to be passed, 23.795% of the votes must be in favor.

Among the top five shareholders present, Datang held 16.83% of the shares and voted against it.

11.61% of the votes were cast, with abstentions.

Taiwanese journalists voted 8.04% in favor.

Shencheng Industrial 6.9%, abstaining from voting.

Fang Zhuo 4.21%, votes in favor.

Others, such as Walden International and the American NEA, voted in favor.

In the end, Wang Ningguo received 46.41% of the votes in favor at the conference and was defeated in the new board of directors of Chip.

Fang Zhuo listened to the description of the parties involved, went through the process of the shareholders' meeting in his mind, and then checked their respective shares and votes. He looked around the conference room and asked: "Is there anything that needs to be added to Mr. Wang's statement?"

Everyone shook their heads, this was the whole process.

"Hey, even the Taiwan reporter voted in favor." Fang Zhuopi smiled, "Its stance this time is quite neutral."

Taiji holds 8.04% of SMIC's shares as compensation from the original lawsuit with Zhang Rujing, but it has not taken any action and is more of a professional investor.

Similarly, from the investor's standpoint, it believes that Wang Ningguo's work is worthy of recognition.

Fang Zhuo asked again: "Why did CIC and Shanghai Industrial abstain from voting? Have they communicated with Datang?"

Although Datang's opposition vote is crucial, the abstentions of these two companies cannot be ignored. If they had firmly voted in favor, this turmoil would have ceased.

Among them, CIC only entered SMIC in April this year and has a board seat. Liu Zunyi became a non-executive director. Shanghai Industrial was one of the earliest shareholders of SMIC and was once the largest shareholder.

Wang Ningguo shook his head, not knowing what was going on here.

"They voted after Datang, probably because Datang was so opposed to it and were on the fence." New director Zhang Wenyi said, "I called Shencheng Industrial on the way here, and the answer I got was also hazy, no. Too much of a staunch ally.”

As long as either of these two parties votes in favor, Wang Ningguo's appointment will be approved.

The current situation is that the voting results have taken effect and Wang Ningguo has been defeated. According to the established agenda, the board of directors will be held on July 2 to elect a new executive director.

SMIC's current board of directors has seven members, two of which are Datang, one from CIC, one from Shanghai Industrial, one from Walden, as well as independent directors Tsuyoshi Kawanishi and newly elected Zhang Wenyi.

Tsuyoshi Kawanishi is the former vice president of Toshiba and serves as an industry consultant.

Fang Zhuo frowned after listening to Zhang Wenyi's words: "Even if there was no communication before, since Datang wants to do things, I'm afraid they have begun to communicate now. If Mr. Wang loses the election, I'm afraid Mr. Zhang will not be willing to accept the position of chairman. ?”

If Datang wants to take action and fight for control, it will not just do one thing. The CEO and chairman pairing of Wang Ningguo and Zhang Wenyi was originally Dr. Jiang’s plan. Since Datang denied the first part, then the board of directors Probably denying the latter part.

Zhang Wenyi nodded and admitted: "It's very possible."

If Dr. Jiang were still here, today's board of directors would definitely still go as planned, but if the situation changes, everything will change.

Fang Zhuo clasped his fingers on the table, suppressing his anger and thinking about the current situation.

Although he owns SMIC's shares, it is only 4.21%. Last year, seeing SMIC's stable recovery, he also turned down his board seat to avoid suspicion. Legally speaking, his role is limited.

However, we cannot just watch SMIC change like this.

At the beginning, he, Zhang Rujing, and Dr. Jiang all discussed the candidate for CEO. Zhang Rujing especially believed that Wang Ningguo was suitable for SMIC, which was in urgent need of stability. Facts have proved that he did meet the requirements.

Once Wang Ningguo resigns, there will inevitably be internal chaos again. Such a CEO who has made great contributions to the company has been unreasonably "removed". How will the internal community view and think?

In particular, there are many factions within SMIC, and the Baodao faction is an important part.

This has been the case since the establishment of SMIC. Founder Zhang Rujing originally brought the Baodao team here. This faction is an important factor in SMIC's rapid development.

There has always been a huge gap in semiconductor talents in the mainland. Even Bingxin is recruiting talents from all over the world. The mainland, Taiwan, Singapore, Japan, the United States, and Europe are all coming.

If a company wants to develop, this is unavoidable, as long as it can be stable and balanced.

When SMIC was first established, Zhang Rujing took this into consideration, and the shareholdings of the major shareholders were relatively balanced, all around 10%. However, with the development and changes, they had to find funds and there was a situation of ebb and flow.

When it comes to Dr. Jiang, he can still maintain balance within the company.

However, the situation is now unbalanced again.

"Everyone is doing their own thing, each is doing his own thing." Fang Zhuo said this and fell into thinking again.

He could roughly guess what Datang wanted.

Datang itself dominates the 3G standard TD-SCDM. If it can seize control of SMIC, it can further integrate its development model and become an IDM role in the country. From design to manufacturing to packaging and market, it will open up the industrial chain and increase Industry status and voice.

Originally, with the existence of Dr. Jiang and his appeal, it was impossible for Datang to fight for control. Even if it was a major shareholder, its shareholding and reputation were not enough to make it happen, but...

In addition, there are external factors that may also have an impact.

In the past two years, the higher authorities have been promoting the integration of central enterprises. Datang's performance is not outstanding, and there may be a risk of being integrated. If it can increase its scale, the risk will naturally be small.

However, such demands are harmful rather than helpful to SMIC.

Now that Datang has taken action, it can naturally use various banners, whether it is how to do good for SMIC, or how to carry out further business linkage, but...

Is this major shareholder proceeding from SMIC's interests this time, or from its own interests... With SMIC's steady recovery, this is not a difficult question to judge.

"I want to take the position of chairman of the board of directors No. 2." Fang Zhuo said after a brief silence. "This must be confirmed first. Dr. Jiang agreed that Mr. Zhang would take over as chairman. It is conducive to the overall stability and the development of the company."

"We only need 4 votes. Mr. Zhang, Takeshi Sichuan, and Walden. These 3 votes are no problem. China Investment Corporation and Shanghai Industrial need one more vote."

"Also, I want to convene an extraordinary shareholders' meeting."

Fang Zhuo said calmly: "When Mr. Zhang gets his job, we will establish the earliest time for the shareholders' meeting."

He paused and then said: "Tonight, I would like to ask Mr. Zhang to go to the capital with me again."

Zhang Wenyi once entered the official career and was a good role in the capital.

This time Datang takes action, if Fang Zhuo wants to intervene, he still needs to do some off-site preventive work.