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The establishment of a long-term mechanism to eradicate occupied by the largest shareholder of the listed company's funds

Author: ZhongJun From: www.yourpaper.net Posted: 2009-07-20 02:22:50 Read:
Abstract: The use of funds from the major shareholder of the status quo start to analyze the reasons in terms of corporate governance, securities market development and policy regulation, and the eventual establishment of a long-term mechanism to eradicate occupied by the largest shareholder funds of listed companies phenomenon suggestions.
Keywords: state-owned large shareholders; listed companies; tying up funds; term mechanism

1 cause analysis

1.1 History "blood transfusion" Spin-off mode causes the "hangover"
Positioning the beginning of the establishment of China's securities market is for "SOE predicament. Most of China's listed companies spun off from the former state-owned enterprises in the part of the relatively high-quality assets from the formation, while most of the non-performing assets and social burden to stay in the parent company. Listed companies structure is irrational, non-standard corporate governance structure.
The shareholding structure of listed companies in China is divided into four parts of the state shares, state-owned legal person shares, the social corporate shares and public shares. The past, only the public shares can be traded, and its only about 30% of the total share capital. In the non-tradable shares, the former state-owned enterprises accounted for the position of absolute control, "due to the dominance. After more than a year the equity division reform, the original non-tradable shares negotiable, but the vast majority is still in the lock-up period, it is now still on the market can not be negotiable.
Such as institutional arrangements rather than market the spontaneous formation of highly concentrated ownership structure. Board of Supervisors and the lack of the effective constraint checks and balances mechanism, unfettered control over large shareholders and related parties, listed companies will naturally become readily use the ATM.
1.2 Listed Companies institutional transition is not complete
(1) the impact of the traditional concept of consciousness. In some large state-owned shareholders of listed companies as a subsidiary or subordinate units, the total of the assets rather than market investors.
(2) restructuring thorough impact. The part of the listing of the company's restructuring is the establishment of production, supply and marketing system is imperfect, or due to special sales system, resulting in a lack of independence of the listed companies, and forced disappearance of a large number of related party transactions with major shareholders and related. A large number of related party transactions become the largest shareholder and related parties occupied the main way of funding or carrier.
1.3 on the behavior of the major shareholders of listed companies, regulatory and constraints of inadequate
Funds of listed companies has been invaded and occupied, the largest shareholder is the "culprit", managers of listed companies is an "accomplice", both should be held accountable and dealt with. SFC is responsible for the supervision of listed companies from government regulatory point of view, the terms of reference are still limited, the controlling shareholder can not supervise. System from the legal point of view, the lack of accountability mechanisms accounting, auditing and other intermediary institutions, lack of laws and regulations to combat the illegal transfer of funds, but also the lack of the litigation system among the interests of minority shareholders by the expropriation.

The establishment of long-term mechanism

Occupied by the largest shareholder funds of listed companies to fundamentally resolve the problem, should first explore solutions to debts problem, followed by actively taking measures to prevent the occurrence of new accounting models phenomenon that has occurred largest shareholder accounting models listed companies through a variety of ways, the last The most fundamental thing is to establish funds used effectively put an end to major shareholders to form a long-term mechanism for protection of independent legal property rights in listed companies.
Solve the settlement issue, such as debt-equity swaps, agreement for sale, discrete and compulsory auction and other measures have been put into practice and achieved good results. And measures to prevent new accounting models occurs will be integrated in the establishment of long-term mechanism. The establishment of long-term mechanism can proceed from both internal and external aspects.
2.1 further improve the corporate governance of listed companies, to improve the company's internal control mechanism
(1) to take advantage of the trend of the share reform, a complete end to the "internal situation under control due to the dominance of" widespread in the listed companies. Wu Xiaoqiu, director of the Finance and Securities Institute of Renmin University of China, that the share reform, China's securities market since the establishment of "the most significant reform to solve the major systemic defects restricting the development of China's capital market, the size of the interests of shareholders of listed companies from the fundamental convergence.
(2) improve the shareholders' meeting. Increase of minority shareholders in listed companies the right to speak, vote for a particular matter, a trial system of class meeting, and to consider the proposal and voting rights of the Big Shareholders reach a certain number, limit large shareholders in general meeting.
(3) improve the supervision mechanism of the Supervisory Board and the independent directors. To limit the number of representatives of the major shareholders in the Board of Supervisors, to increase the number of representatives of minority shareholders in the Board of Supervisors; improve the terms of reference of the Board of Supervisors authority requirement to make specific and operability. (4) improve the information disclosure system of listed companies. Strict implementation of the SFC released on February 1 this year, listed companies' information disclosure management approach "by the behavior of the information disclosed in a timely and effective supervision of large shareholders.
2.2 to further strengthen the regulation of the behavior of shareholders of listed companies
(1) expand the regulatory authority, the provisions of the Securities and Exchange Commission departments of large shareholders, the securities regulatory authorities have the right to investigate and collect evidence of the occupation of the interests of the listed company's largest shareholder, from the institutional constraints encroachment of large shareholders behavior. Conversion from assault storming to strengthen day-to-day supervision, and establish accountability mechanisms.
(2) to give full play to the role of accounting firms and other market intermediaries, to strengthen its independence. Strengthen contacts and cooperation with the AICPA, and gradually establish intermediaries appraisal system, supervision and securities practice qualification CPA continuously improve the the practitioners professional ethics and quality of work, and give full play to the role of the "economic police", with the regulatory authorities formation of regulatory efforts.
(3) to strengthen communication and cooperation with the local government and State departments, to urge large state-owned shareholders to regulate their own behavior. Supervision and cooperation with local governments and state-owned assets supervision and administration, the China Banking Regulatory Commission and other departments to establish regulatory norms of state-owned controlling shareholder behavior coordination mechanism to guide about the state-owned controlling shareholder to safeguard the legitimate rights and interests of the listed company.
(4) give full play to the binding effect of the market and the supervisory role of the news media. Increasingly close after the split share structure reform, the interests of the major shareholders and the stock market, news monitoring the increasingly powerful role, is an important market constraints weapons.
2.3 improve the relevant laws and regulations, and strict law enforcement
(1) strictly enforce the law, to increase penalties for illegal operations and personnel, and increase its cost of non-compliance. Strengthening enforcement and regulations of the funds used to pay attention to the various aspects of the collaboration.
(2) the improvement of legislation. Improve the company's civil, administrative and criminal law liability regime. Information disclosure system and to raise funds to improve the amount of funds used to use the legal system to protect the right to information and decision-making power of all the investors of the funds used.
(3) improve the administration of justice. Shareholders sue on behalf of the company's derivative litigation system. Civil compensation mechanism, improve the securities market and the relevant persons responsible for the illegal operations of listed companies and their shareholders damaged shareholders bear civil liability.
2.4 purification the market external environment, and promote the establishment of the entire social credibility system
(1) the establishment of a sound social security system to address shareholders after stripping outstanding assets in the the surplus personnel employment, health care, pension and other social security burden, as soon as possible separation of enterprises running social functions. For the problems of the parent enterprise, should deepen reform, strengthen its "ability to reduce the drag on listed companies, listed companies can operate independently.
(2) to promote the establishment of the integrity system as a whole, both the root causes to solve the large shareholders malicious accounted paragraph. The same time, through education and advocacy to improve the awareness of the rights of minority shareholders, take the initiative to use legal means to protect their own interests.
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