Xiaosong Co. controlling shareholder moves to oust director Xu Chi over independence concerns
Xiaosong Co.'s controlling shareholder Jiasheng Times (9.43% stake) proposed removing director Xu Chi, alleging he lacked independent judgment and was unduly influenced by his nominating shareholder. Xu Chi, who voted against the 2026 semi-annual report and a share issuance plan, called the move retaliatory and procedurally flawed. The board voted 4-1 to submit the proposal to a shareholder meeting on September 30, 2026. Xu Chi reserved legal rights.
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Cross-source coverage
Common ground
- The timing of Xu Chi's removal proposal, right after his dissenting votes and cooperation with regulators, strongly suggests retaliation rather than a good-faith governance concern.
- The procedural issue about whether the removal proposal was submitted after the statutory deadline is a critical legal vulnerability that could invalidate the entire shareholder vote.
- The Shenzhen Stock Exchange should investigate this case to ensure directors who cooperate with regulators are protected from retaliation.
- Minority shareholders holding the majority of shares are the real losers, caught between two factions fighting for control rather than the company's survival.
Points of contention
- Whether Xu Chi's dissenting votes were principled oversight or a strategic power play to protect his faction's stake from a dilutive private placement.
- Whether the controlling shareholder's removal attempt is illegitimate retaliation or a legitimate exercise of control over a director blocking their agenda.
- Whether the colonial analogy is a valid way to describe the power dynamic between a 9.43% controlling shareholder and a 4.79% minority block.
- Whether the financial deterioration (25% revenue drop, 68% wider losses) automatically makes Xu Chi's dissent virtuous or is just evidence of a failing company.
Blind spots
- The debate largely ignored the interests and perspective of the 85% of shareholders not represented by either faction, who bear the consequences of this power struggle.
- No one examined whether Xu Chi's failure to raise objections during the Q1 review, shortly after joining the board, might indicate selective or strategic timing.
- The discussion did not consider the possibility that both factions could be acting in bad faith—one pushing dilutive financing and the other blocking it to preserve their own stake.
WorldAttention’s read
This case is fundamentally a power struggle between two minority shareholder blocks—one holding 9.43% and the other 4.79%—over a company with severe financial distress, including a 25% revenue drop, 68% wider losses, and cash reserves far below short-term debt. While the controlling shareholder's removal of Xu Chi appears retaliatory given the timing right after his dissenting votes and cooperation with regulators, his motives remain unclear: he may be exercising principled oversight or strategically blocking a dilutive placement to protect his faction's stake. The procedural deadline issue is the strongest legal challenge, potentially invalidating the entire vote. The real losers are the 85% of minority shareholders caught in the middle, with neither faction clearly acting in the company's best interest. The Shenzhen Stock Exchange should investigate to protect whistleblowers and ensure procedural rules were followed, but this case highlights how corporate governance can break down when control battles override the company's survival.
Reporting timeline
Xiaosong Co. controlling shareholder moves to oust director Xu Chi over independence concerns
On September 21, Xiaosong Co. (002723) announced that its controlling shareholder, Jiasheng Times, proposed to remove director Xu Chi from the board. Jiasheng Times, holding 9.43% of shares, submitted a temporary proposal on September 18 to oust Xu, citing his alleged over-reliance on the nominating shareholder's opinions and lack of independent judgment, which it claims violates director duties. The shareholder initially also proposed electing Luo Minghua as a replacement but withdrew that proposal on September 20. Xu Chi responded, arguing the proposal was submitted at the legal deadline and may be invalid if received late, that the accusations lack specific facts, that the shareholder cannot determine board order, and that the move is retaliation for his recent opposition votes on the 2026 semi-annual report and a share issuance plan. Xu had voted against both items, citing concerns over financial reporting accuracy and the share issuance's legitimacy. The board voted 4-1 to submit the removal proposal to the September 30 shareholder meeting. Xu reserved the right to take legal action.
Read sourceXiaosong Co. controlling shareholder moves to oust director; Xu Chi defends against removal
Xiaosong Co. (002723) faces a boardroom battle as its controlling shareholder, Jiasheng Times, proposes to remove director Xu Chi, citing a lack of independent judgment and alleged interference with board procedures. The proposal, submitted on September 18, 2026, will be voted on at an extraordinary shareholder meeting on September 30. Xu Chi, who represents the interests of the late founder's son, denies the allegations, calling the move retaliatory after he voted against the company's semi-annual report and a share issuance plan. He argues the proposal was submitted at the legal deadline and lacks specific evidence. The board has approved the proposal for shareholder vote, while Xu Chi reserves legal rights. The dispute highlights tensions between the controlling shareholder and minority shareholder representatives over corporate governance and strategic direction.
Read sourceXiaosong Co. boardroom battle escalates: controlling shareholder moves to oust dissident director Xu Chi
Xiaosong Co., a Chinese listed company, is experiencing an escalating boardroom conflict. Controlling shareholder Jiasheng Times has submitted a last-minute proposal to remove director Xu Chi from the board, just days before a scheduled shareholder meeting on September 30. Xu Chi had previously voted against the company's 2026 semi-annual report and a share issuance plan, citing concerns over financial performance and governance. He alleges the removal attempt is retaliation for his dissenting votes and truthful responses to a Shenzhen Stock Exchange inquiry. Xu Chi argues the proposal was submitted at the legal deadline, potentially invalidating it, and that the stated reasons for his removal are false. The board voted to submit the proposal to shareholders, with Xu Chi the sole dissenter. The dispute follows a change in control in April 2026, after which the company reported a significant decline in revenue and a widening net loss for the first half of 2026. The company also faces a liquidity crunch, with limited cash on hand versus substantial short-term debt, and is relying on a pending share placement to raise funds.
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Controlling shareholder of Xiaosong shares proposes to remove director Xu Chi
On September 21, Xiaosong Co., Ltd. (002723) announced that its controlling shareholder, Jiasheng Times, proposed to remove director Xu Chi, citing a lack of independent judgment and interference with board operations. The proposal was submitted as a temporary motion for the company's fourth extraordinary general meeting of shareholders in 2026. Xu Chi, who previously voted against the 2026 semi-annual report and a private placement plan, defended himself, arguing the motion is a retaliatory act and lacks factual basis. He noted the proposal was submitted just after his dissenting votes and responses to a Shenzhen Stock Exchange inquiry. The board approved the motion for shareholder vote, but Xu Chi raised four objections, including timing and procedural issues. The meeting, originally set for September 28, has been postponed to September 30. Xu Chi stated he reserves the right to take legal action.
Read sourceXiaosong Shares director faces ouster after opposing half-year report and share placement
On September 21, 2026, during a midday trading halt, Xiaosong Co., Ltd. (Xiaosong Shares) disclosed that its controlling shareholder, Jiasheng Times, had proposed the removal of director Xu Chi. Jiasheng Times, holding 9.43% of shares, accused Xu of being unduly influenced by his nominating shareholder and lacking independence, violating his fiduciary duties. The board approved the proposal by a majority, scheduling a shareholder vote for September 30. Xu Chi submitted a lengthy written objection, arguing the proposal was procedurally invalid as it was submitted on the statutory deadline and received late, and that it constituted retaliation. He noted the proposal came shortly after he cast the sole dissenting votes against the company's 2026 half-year report and a proposed share placement to the controlling shareholder and its affiliate. Xu, a lawyer and partner at Guangdong Xindesheng Law Firm, was elected in July 2026. The article attributes these claims and counterclaims to the respective parties, with no independent verification.
Controlling shareholder of Xiaosong Co. moves to oust director over independence concerns
On September 18, 2026, Jiasheng Times, the controlling shareholder of Xiaosong Co. (stock code 002723) holding 9.43% of shares, submitted a temporary proposal to the board to remove director Xu Chi. The proposal, to be voted on at the fourth extraordinary general meeting of shareholders in 2026, alleges that Xu Chi was overly influenced by his nominating shareholder, lacked independent judgment, and disrupted board operations, violating his fiduciary duties. Xu Chi, a non-independent director representing a 4.79% shareholder, denied the claims, arguing the proposal was procedurally flawed, lacked specific evidence, and was retaliatory for his recent dissenting votes on the 2026 semi-annual report and a private placement plan. He cited his independent opposition to those proposals as evidence of his independence. The board, except for Xu Chi, approved submitting the removal proposal. The shareholder meeting was rescheduled from September 28 to September 30, 2026. Xu Chi reserved the right to take legal action.
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