The Unraveling of Du Shuanghua and the Sale of Rizhao Steel in 2010

In 2010, the unravelling of Du Shuanghua and the sale of Rizhao Steel caused a stir in the business world. The events that transpired left many wondering what had happened behind the scenes. This article will explore those questions and provide insights into one of China’s largest steel producers.

The story of Du Shuanghua’s dominance and unyielding campaign to increase his control over the vast steel industry in China starts in the 1980s. At that time, he was a low-level manager in Rizhao Steel (he later founded Shandong Steel and Rizhao Steel), an unremarkable state-owned company with few prospects.

However, Du’s ambition and desire for power would fuel his rise to the top of what is now called Shandong Steel Group, which would become one of the largest steel companies in China. It ranked 21st among all Chinese enterprises by revenue in 2015.

As Rizhao Steel expanded, Du began acquiring smaller companies in his bid to become a national steel powerhouse. Once he had accumulated enough assets under Rizhao Steel, he split the company into two new entities: Shandong Iron and Steel Group (ShanSteel) and Shandong Rizhao Steel Plate Company Limited.

Du also worked hard to improve the reputation of his companies by building hospitals and making other charitable donations. His efforts paid off unexpectedly: the government of Shandong province permitted him to build a private golf course on land owned by Rizhao Steel.

Du didn’t take long to make another power move, this time trying to buy out ShanSteel. The chairman of ShanSteel, however, refused to accept Du’s offer. Undeterred, Du acquired 99% of ShanSteel’s shares through his private holding company, Yaohua Industry Group.

Not even the provincial government could sway Du at this point; he had become highly influential in Shandong province and was now considered a local business leader.

In 2007, Du Shuanghua was appointed chairman of Rizhao Steel after ShanSteel merged.

As the years passed, Du’s power grew. He was in complete control of Rizhao Steel, and with little outside pressure to share control of Yaohua Industry Group, he ruled as an undemocratic dictator.

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