Employing the theory of corporate governance, this paper analyzes the tragedy of GITIC, indicates that GITIC possessed the character of corporate governance of SOEs in transition, by which the author means insider control under executive intervention. Executive intervention contributed to the survival and development of GITIC, whereas it induced inefficient allocation of financial resources; the efforts of insider to seek for benefit from rights of control generated expansion of enterprise and diversification of business by externalizing risks. This corporate governance resulted in accumulation of risks and deterioration of assets, which eventually led to the bankruptcy of GITIC.