Actually the controllers of listed companies are the benefit expropriation. Based on unclear property rights and invalid government supervision mechanism, the actual controller of S*ST Guangming transferred the listed company resources to the affiliates whose controllers are himself by the tunnel .This paper analyzed the failure reason of China’s company governance mechanism and the lost of Chinese government control. Brifly speaking, to protect the stateowned assets and other public interests of investors, Chinese government should issue clear property rights, improve corporate governance mechanism; strengthen supervision system and incentive system on the agents and dealers of government.