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Decision targets reform of State enterprises
By Fei Li (China Daily)
Updated: 2006-02-23 05:52
The government's decision to introduce a stock option plan in overseas-listed
SOEs is just the latest move to reform the SOEs and also a sign that SOE reform
is accelerating.
It comes at the heels of a relaxation last month of a nine-month-old ban on
management buyouts (MBO) in large-scale SOEs.
Following then widespread public concern that MBO were causing State asset
losses, authorities issued a rule last April freezing the MBO in large-scale
SOEs.
State-owned Assets Supervision and Administration Commission (SASAC), the
country's State company watchdog, relaxed the ban on January 22, allowing
limited purchases of shares by SOE executives.
In a bid to alleviate public worries that some SOE managers may make use of
the new regulation to their own gain and thus result in losses of state assets,
SASAC issued detailed guidelines on how those shares buyout activities could be
carried out. The new rule, for example, requires that executives should provide
certificates that can prove the validity of their capital sources for their
share purchase.
(China Daily 02/23/2006 page11)
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