The first aspect is the pricing issue of debt-to-equity swaps. This is not the focus today. The manufacturer entrusts a professional law firm and experienced lawyers to first conduct due diligence; the dealer simultaneously conducts asset verification and financial auditing, which is then confirmed through third-party audit; afterward comes the business negotiation stage, where both parties agree on the share price, corporate governance methods, and operations; finally, a debt-to-equity swap agreement is signed, filing and registration are carried out, and the party formally becomes a shareholder.

Today we focus on how to use legal techniques to achieve the integration of dealers. Through integration, the goal is basically to standardize dealers' business conduct and to upgrade and transform dealers so that they conduct corporate governance in accordance with laws, regulations, and the articles of association. Standardizing corporate business conduct aims to correct dealers' past habitual go-it-alone behavior into standardized operation within the framework of corporate operations. The upgrade and transformation of corporate governance has far-reaching significance: it involves the framework design of the company's shareholders, directors, supervisors, and senior management, as well as the formulation and implementation of rules of procedure. It carries the basic concepts of modern corporate legal person governance and can create a long-term, stable internal environment for corporate growth and operation.

Shareholder Rights

After the debt-to-equity swap, the manufacturer will formally become a shareholder of the dealer. So, as a shareholder, what rights does it actually have, and how should these rights be used?

According to the purpose of the conduct associated with shareholder rights, they are divided into rights for self-benefit and rights for common benefit. Rights for self-benefit refer to rights exercised to protect one's own interests. Rights for common benefit refer to rights exercised by shareholders to protect the company's interests, including their own interests, and the interests of all shareholders.

Rights for self-benefit generally include: the right to request dividend distribution, the right to request distribution of residual assets, the preemptive right to subscribe to new shares, the right to withdraw shares, the right to transfer shares, and the right to request a change of shareholder name. Rights for common benefit generally include: voting rights, the right to bring derivative actions, the right to request the convening of an interim shareholders' meeting, the right to convene and preside over an interim shareholders' meeting, the right to propose motions, the right to question, the right to sue for confirmation of invalidity of shareholders' meeting resolutions and board resolutions, the right to sue for revocation of shareholders' meeting resolutions or board resolutions, cumulative voting rights, the right to inspect accounting books, and the right to request dissolution of the company.

The Right to Know Is Key

A shareholder's right to know refers to the right, as an investor in the company, to be informed about and inquire into the company's operations, decision-making, and other matters. It usually includes the right to inspect accounting books and the right to request inspection and copying of relevant company documents. The author believes that if the right to know is used well, even if you are only a minority shareholder with a very small shareholding ratio and very limited voting rights, you can effectively constrain and standardize the operations of major shareholders and controlling shareholders, and safeguard the company's operation in accordance with laws, regulations, and the articles of association.

Even close brothers should keep clear accounts; this means implementing the right to know. Through the methods, channels, timing, format, questioning, replies, and inquiries for implementing the right to know, the right to know should be institutionalized and normalized.

Through shareholder status, implementing the right to know actually opens a channel to understand and grasp the dealer's core materials, such as internal financial information, customer information, sales files, and operational information. The significance of realizing this function is self-evident.

Do Not Be a Hands-Off Shareholder

Cooperation among shareholders requires both technique and art. Unless you are the boss and the controlling shareholder, and the company is all decided by you, maintaining relationships among shareholders determines the company's survival and future. How to maintain good shareholder relationships, maintaining good trust and cooperation while preventing infringement of each other's rights and interests, is an art!

The core of this art is appropriate rules of procedure. Most Chinese people lack a sense of rules, so the common pattern is harmony at the beginning, resentment later, and final disintegration. Among the various investors contacted by Zhong'an Dexin TM, the problems that arise mainly lie in respect for and implementation of shareholder rights. All shareholders lack the necessary understanding: either shareholder rights are reduced to simple friendships, with rights safeguarded by personal ties and friendship, or there is mutual distrust, the big eating the small, and the strong bullying the weak. Therefore, most companies do not last long.

How can the integrated company achieve long-term, stable operation and development, establish a modern legal person governance structure, use appropriate rules of procedure as a link, value the rights of minority shareholders, and allow all shareholders to participate appropriately in management and decision-making? At the current social stage, it is impossible to require meetings to follow "Robert's Rules of Order," but all shareholders should recognize that regular meetings and communication are important. Meetings should not be one-person monologues or chaotic free-for-alls, but should create a good atmosphere of mutual respect, equal exchange, collective wisdom, and proactive implementation of meeting outcomes among all participants. Such rules of procedure have universal significance for shareholder relationships and internal management in all types of companies.

In short, for construction machinery manufacturers and financial leasing companies, using debt-to-equity swaps to achieve capital penetration into dealers is absolutely a major strategic shift and requires demonstration and discussion from all sides. For most companies, this strategy may only remain a paper study. But Sany is ahead of the pack and has in fact been very successful, having firmly maintained a large group of high-quality dealers, which is why Sany can go further.