After Wong Kwong Yu was arrested, main agency conflicts of GOME transformed from agency conflicts of controlling shareholders and minor shareholders to agency conflicts of controlling shareholders and managers' actual control rights. This transformation has made the level of agency conflicts of GOME increased from operating risk, ownership structure and debt contracts. The increase of agency conflicts may result in perfecting GOME's internal corporate governance mechanism in ownership structure, board of directors, executive compensation and promoting the increase of corporate performance.
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