Investors put in billions—but have no voting rights? How is DeepSeek so powerful?

Put plainly: Limited partners (LPs) provide the capital; general partners (GPs) manage operations; the platform holds shares, and the GP exercises voting rights on behalf of the platform. Who is the GP? Take Hangzhou Chengli Enterprise Management Consulting Partnership (Limited Partnership) as an example: its GP is Hangzhou Chengce Business Consulting Co., Ltd., which is 99% owned by Liang Wenfeng. So: Yes, this arrangement is fully legal. You don’t lack voting rights—you’ve legally delegated them to Liang Wenfeng to exercise (😉). II. Why does Liang Wenfeng dare negotiate terms like this? Simple: Liang Wenfeng doesn’t need to bow to capital—*he himself is the world’s top-tier capitalist.* In 2008, Liang Wenfeng entered China’s A-share market—nicknamed “Mian A”—with just RMB 80,000 of personal capital. By 2015, he’d grown it into a ‘small goal’ (RMB 100 million). In seven years, purely through stock-trading skill, his capital multiplied 1,250-fold. To put that in perspective: I asked AI to calculate—it equates to an average compound annual return of 177% for seven consecutive years. Even Buffett wouldn’t claim that. DeepSeek had *no external investors* in its early days—Liang Wenfeng personally invested RMB 20 billion. That’s what absolute control looks like. (leans back tactically) So even within the investment arena, Liang Wenfeng outperforms these so-called “professional investment institutions.” At a 177% annualized return, his RMB 20 billion would grow to RMB 35.4 billion in one year—generating RMB 15.4 billion in profit annually. To him, a few billion in outside investment equals just one quarter’s profit. “I’m willing to take your money—that’s doing you a favor.” Though bold, he truly *has earned* the right to say it. Of course, investors aren’t naive. They waive voting rights partly because they acknowledge Liang Wenfeng’s superior capability—and partly because they’re betting on DeepSeek’s future valuation growth and exit opportunities. Some industrial investors may also value technology collaboration, ecosystem access, or strategic positioning. Voting rights are valuable—but DeepSeek is *more* valuable. III. Ordinary companies raising funds can’t emulate Liang Wenfeng—but here are several practical suggestions: 1. Clarify the relationship between shareholder voting (based on shareholding ratio) and board voting (based on headcount). There are two types of voting rights: one exercised at shareholder meetings (proportional to shareholding), and another at board meetings (one vote per director). At shareholder meetings, ordinary resolutions pass by simple majority; major matters—including amending the articles of association, increasing/decreasing registered capital, mergers, divisions, or dissolution—require a two-thirds supermajority. At board meetings, however, decisions follow headcount voting: boards typically comprise odd numbers (e.g., 3, 5, or 7 directors), each with one vote, and all resolutions require only a simple majority. A common pitfall: failing to explicitly link board nomination rights to shareholding ratios. Early investors often retain board seats—even after dilution reduces their equity stake significantly—because the articles fail to stipulate that nomination rights lapse once shareholding falls below a certain threshold. This grants them disproportionate influence relative to their actual ownership. Pay close attention to this. 2. Is the veto right exercisable at the shareholder meeting—or at the board level? Legally, both shareholder and board voting procedures may incorporate special rules beyond statutory requirements—including reserved veto rights.

I hold 67% of the company’s voting shares and five board seats—but I control only two directors. Many board resolutions conflict with my views, and I want to replace them. What should I do?

II. Since you control the shareholders’ meeting, why not resolve the issue there? That’s the crux. Holding 67% of voting shares normally gives you strong decision-making leverage at the shareholders’ meeting. The shareholders’ meeting has statutory authority to elect and remove directors, approve the board’s work report, ratify profit distribution plans, and decide other matters within its jurisdiction. But here, two distinct issues must be clearly distinguished: For matters *legally requiring shareholder approval*, you may decide their adoption or rejection via shareholder vote; for routine operational decisions falling squarely within the board’s statutory authority, the shareholders’ meeting cannot simply override every board resolution. For instance, when the board lawfully decides on the company’s business plan or investment proposals, being a majority shareholder does *not* entitle you to bypass the board and unilaterally dictate all day-to-day operational decisions. However, if your core concern is that the current board is uncooperative—rendering the corporate decision-making mechanism dysfunctional—you can absolutely consider reshaping the board composition through the shareholders’ meeting. III. Can you directly replace existing directors if dissatisfied? Yes—this merits serious study and is among the most critical avenues you should explore. Under the Company Law, the shareholders’ meeting of a joint-stock company holds statutory authority to elect and replace directors. It may also adopt a resolution to remove directors, effective upon adoption. Thus, if the incumbent directors were elected by the shareholders’ meeting as ordinary directors, first review your Articles of Association regarding election and replacement procedures—and then lawfully initiate a shareholders’ meeting resolution. Yet one crucial institutional feature warrants special attention in joint-stock companies: *cumulative voting.* Per Article 117 of the Company Law, the shareholders’ meeting may apply cumulative voting for electing directors and supervisors—as stipulated in the Articles or resolved by the meeting itself. Under cumulative voting, each share carries as many votes as there are director (or supervisor) positions to be filled, and shareholders may concentrate all their votes on a single candidate. One purpose of this system is to enable minority shareholders to pool votes and secure representation on the board. Still, if you genuinely hold 67% of ordinary voting shares—and the five directors were elected simultaneously under identical conditions—you should typically enjoy strong seat-securing advantages. If you currently influence only two directors, further investigation is needed: How exactly were they elected? Was cumulative voting applied? Are there special-class shares, reserved seats, or other rules affecting director nomination and election? Don’t assume automatic control over all board seats merely because you hold 67%—nor conclude you’re powerless to change the status quo just because you currently sway only two directors. Naturally, replacing directors isn’t consequence-free. Removing a director before term expiry without just cause entitles that director to seek legal compensation from the company. Therefore, the first step isn’t rushing to oust directors—but verifying how they were appointed, reviewing the Articles’ provisions, and identifying the precise procedural path for adopting a resolution. IV. If you’re already the chairman, why don’t you hold veto power?

5E Advanced Materials Stockholders Vote on Board Seats December 7

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5E Advanced Materials Inc. will hold its annual stockholders meeting on December 7 to elect five directors and ratify PricewaterhouseCoopers LLP as its auditor.

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5E Advanced Materials Stockholders Vote on Board Seats December 7

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