Wu Changjiang, founder of NVC Lighting, Yanyan, current president of NVC and Zhuhai, president of Schneider (China) reconciled with each other publicly, marking the end of months of infighting in NVC Lighting. Lately, People’s Daily Onlineinvited Dr. Zhang Xiaofei, President of GG Industry Institute (GGII), to talk about the infighting of NVC Lighting. Here is the video clip of the discussion.

Editor’s note: In recent four months, the infighting of shareholders of NVC Lighting has been the focus of the mass media. After a series of incidents, such as the resignation of senior executive and mass strike, all parties turned back to rationality. With Wu Changjiang’s return to NVC Lighting, it seems that the infighting has been settled. Looking back on the whole event, is there any unknown reason behind the resignation of Wu Changjiang, the founder and operator of NVC Lighting? What’s the real purpose of the return after the game playing? Most importantly, is his return a good thing or a bad thing to the long-term development of NVC?

Here is the video clip.


Here is a compile of part of the discussion.
 
Main reason of the resignation: abnormal operation and related party transaction hurt the interests of shareholders
 
Dr. Zhang Xiaofei, President of GG Industry Institute (GGII) with years of research experience in lighting industry, analyzed the main reason behind the resignation of Wu Changjiang.
 
In the development course of NVC Lighting, there existed the related party transaction between Wu Changjiang and his team and their relatives. The related party transaction is actually transferring the interests of the shareholders of the listed company, no matter big or small, to their families.
 
When the interests of other shareholders are damaged to a certain level, the shareholders will seek for an opportunity to change the situation. The opportunity is the outbreak of Chongqing event, due to which, Wu Changjiang was investigated and went abroad. Under this scenario, the investors and other shareholders forced Wu Changjiang to resign voluntarily.
 
The truth behind Wu Changjiang’s return: a compromise to save the stock price
 
With regard to the high-profile reconcilement of Wu Changjiang and Yanyan at the end of September, Zhang Xiaofei believes that the reconcilement and the return is a compromise to save the stock price.
 
Wu Changjiang cornered the investors with such methods as stopping supplies and mass strike. To investors, the rise of stock price and the return on investment count the most.
 
Zhang Xiaofei supposed that the two parties must come to an agreement. For example, Wu Changjiang and his team are prohibited from the related party transaction and abnormal operation in the future operation of the company.
 
In the long term, Wu Changjiang’s return is no good to NVC
 
Judging from the stock price trend of NVC from HKD 0.7 to more than HKD 2, the return of Wu Changjiang met the expectation of shareholders. However, in the long term of NVC, Zhang Xiaofei believes that the return of Wu Changjiang is no good to NVC.
 
In the initial development of a company, or in the rapid development of an industry, NVC’s unprofessional management characterized by family bond and brotherhood can effectively boost up the business growth. However, when the new LED lighting industry has formed a strong impact on traditional lighting and the traditional lighting enterprises are forced to reform and update, the management becomes out of time.