One of the most commonly used ways to restructure big and medium-sized state-owned enterprises (SOEs) in China is through shareholding reform. This article classifies the shareholding reform into four modes and explores the relationship among these modes, in terms of the degree of control over controlled listed companies and govance efficiency. Using data of 285 SOEs during 1997-2000 (three years after their IPO), we find that restructuring modes affect the degree of control by controlling shareholders over listed companies. Furthermore, the controlling shareholder of incompletely restructured enterprises prefers a higher degree of control. In addition, the higher the degree of control, the more serious the problems of related trading and tunneling behaviors. We also find that restructuring modes affect the govance structure of listed companies, which in t affect the degree of related trading and tunneling behaviors. These findings reveal that incomplete restructuring of SOEs before their listing is likely to make these enterprises be vulnerable to extal control and thus negatively affects their govance efficiency.