Core Viewpoint - The board of directors of Dream Jie Co., Ltd. (002397) held a meeting on December 22, 2025, where a proposal to amend the company's articles of association was passed despite dissent from board member Chen Jie, who raised concerns about the concentration of power and governance issues within the board [1][2][3]. Group 1: Board Meeting and Voting Outcomes - The board meeting was attended by all 8 directors, with independent director Qin Zheng participating via remote voting [1]. - The proposal to amend the articles of association was approved with a vote of 7 in favor, 1 against, and 0 abstentions [2]. Group 2: Opposition and Concerns Raised - Chen Jie voted against the proposal, arguing that it would allow a minority to control the board, undermining the interests of all shareholders [3]. - The amendment reduces the board from 11 to 7 members, potentially giving Chairman Jiang Tianwu disproportionate control over board operations [3]. Group 3: Qualifications of Board Members - Chen Jie expressed concerns about Jiang Tianwu's qualifications to serve as a non-independent director, citing past regulatory penalties for failure to disclose non-operational related transactions and other violations [4][6]. - Chen Jie highlighted that Jiang Tianwu's continued role as chairman could jeopardize the company's governance and the interests of minority investors [4][6]. Group 4: Allegations and Company Response - Chen Jie has been a vocal critic, having voted against various proposals since joining the board, and has made serious allegations against Jiang Tianwu and other executives, including contract fraud and misappropriation of funds [8][9]. - Dream Jie Co., Ltd. issued a statement denying Chen Jie's allegations, asserting that they are unfounded and damaging to the company's reputation [9]. Group 5: Company Performance and Financials - Dream Jie Co., Ltd. has faced declining revenues, with sales dropping from 2.463 billion to 1.715 billion from 2021 to 2024, and consecutive losses in 2021 and 2022 [9]. - Despite a small profit in 2024, the company closed over 400 stores, and revenue for the first three quarters of 2025 still showed a decline of 7.97% year-on-year [9].

Core Insights - The acquisition of controlling stakes in listed companies involves not only financial competition but also the struggle for control, particularly concerning the board of directors' potential betrayal [1][2][5] - The board of directors plays a crucial role in determining the strategic direction and daily operations of a company, making their alignment with the acquirer essential for successful mergers and acquisitions [2][6] Group 1: Risks of Board Betrayal - The phenomenon of "backstabbing" by the board is not uncommon in capital operations, where board members may act against the acquirer's interests due to various motivations [5][6] - Even after securing shareholder approval, acquirers may face significant opposition from the board, which can jeopardize the entire acquisition plan [5][6] Group 2: Understanding Control Dynamics - Control is not solely in the hands of shareholders; the board often wields significant decision-making power, complicating the acquisition landscape [6][9] - Key figures within the board, such as the CEO or chairman, can exert considerable influence, leading to a situation where the perceived control by shareholders may be misleading [6][9] Group 3: Strategies for Ensuring Board Cooperation - Goheal employs several strategies to mitigate the risk of board betrayal, including pre-acquisition communication with board members to align interests [7][8] - The firm may also negotiate changes in board composition or power dynamics to ensure that the board represents the acquirer's interests post-acquisition [7][8] - Detailed board-related clauses are included in acquisition agreements to secure control and ensure compliance, thus preventing legal loopholes that could undermine the acquirer's position [7][8] Group 4: Conclusion on Control - The ultimate goal of acquiring control in listed companies should be to achieve comprehensive governance rather than merely obtaining shareholder consent [9][11] - Investors must recognize the potential threats posed by the board and consider strategies to ensure its stability and cooperation during acquisitions [11]