In the context of the era when there are many gaps in the management and supervision of state-owned enterprises' equity participation, loose investment decision-making, and strong arbitrariness in the way of equity participationOn June 23, 2023, the management of equity participation of state-owned enterprises finally ushered in new regulations. The promulgation of the Interim Measures for the Administration of Equity Participation in State-owned Enterprises (Guo Zi Fa Reform Gui 2023 No. 41, hereinafter referred to as "Circular No. 41") replaces the original Notice on Matters Concerning the Strengthening of the Management of Equity Participation by ** Enterprises (Guo Zi Fa Reform Gui 2019 No. 126, hereinafter referred to as "Circular No. 126").In addition to explicitly expanding the regulatory objects from ** enterprises to state-owned enterprises, it is also to clarify the regulatory framework and refine the provisions layer by layer, so that the participation of state-owned enterprises can truly achieve legal basis. The changes in the above two documents are compared and analyzed as follows:
The following is a summary compiled by the author, and the specific content of the article is detailed in the original article.
1. General Provisions [New].
[Definition of Equity Participation].
Understanding 1: If the shareholding ratio exceeds ( ) 50%, it is in principle a state-controlled enterprise with actual control.
Understanding 2: A situation in which the shareholding ratio is allowed to be ( ) 50%, but there is no actual control.
Understanding 3: The state-owned enterprises under the legal system of this office should be a company-based enterprise.
1) As far as the basis for formulating these measures is concerned, the basis for the formulation of these measures includes the Company Law, but does not explicitly include the Partnership Law and other relevant laws and regulations;
2) As far as the content of the clauses is concerned, each clause of these Measures uses terms unique to corporate enterprises, such as "nominee director" in Article 8;Article 9 of the "Articles of Association";Article 11 "shall be decided by the board of directors or the management without a board of directors", etc., and does not refer to the relevant expressions of partnerships.
3) As far as similar policies involving equity management are concerned, the SASAC publicly replied that partnership enterprises do not apply to the Administrative Measures for Reducing the Burden of State-owned Assets Transactions of Enterprises (SASAC and Decree No. 32 of the Ministry of Finance), that is, they are not subject to the measures.
II. Equity Investment Management [Revision].
[Audit supervision].
Understanding 1: In the investment agreement, the articles of association, rules of procedure and other institutional documents of the shareholding enterprise, it is recommended that the state-owned enterprise make an agreement on its own audit and supervision rights.
Understanding 2: Under the legal background and market situation of respecting the operational autonomy of shareholding enterprises, it is necessary to pay attention to how to agree in writing in advance on the right of state-owned enterprises to consult and copy the original accounting vouchers and other materials required for auditing, so as to protect the audit rights and maintain the balance between them and their operational autonomy.
[Contribution requirements].
Understanding 1: No advance of any form shall be provided for the capital contribution of other shareholders.
Understanding 2: Unless otherwise specified, capital contributions shall not be paid prior to other shareholders. The "provisions" refer only to laws and regulations, and do not include investment agreements or articles of association. [Reminder: It must be clearly stipulated in the investment agreement first, and cannot refuse to perform its capital contribution obligations on this ground when other shareholders fail to make capital contributions on time].
Understanding 3: The contribution of non-monetary assets should be subject to asset appraisal and the value of state-owned assets should be confirmed in a fair and reasonable manner.
3. The operation and management of equity participation [revision].
Fourth, the management of equity withdrawal [new].
V. Supervision and Accountability [Revision].
6. Supplementary Provisions [New].
Editor-in-charge: Zhou Jiantao
Practice area: private equity ** investment, commercial disputes.
Master of Lancaster University, with a composite background in management and law at home and abroad, has worked in large investment banks and PE investment institutions, specializing in private equity investment, corporate asset restructuring, investment banking business and large-scale commercial dispute cases.
Author: Zhong Yunshi
Master of Financial Crime and Regulation, Macau University of Science and Technology. He has provided perennial legal services for ** departments, enterprises and institutions, and also managed civil and commercial and administrative litigation business, with corporate legal affairs as the leading direction.
Author: Hu Zhipeng
He holds a bachelor's degree in international economic law from China University of Political Science and Law and a master's degree in civil and commercial law from Wuhan University, focusing on legal services in equity investment, mergers and acquisitions, and due diligence. He has worked in the Songshan Lake Management Committee and has rich experience in administrative management and risk control.