Study On Political Benefits Of Control And Local Government Intervention

With the spread of modern equity shares of the company, the company emerged separating ownership and control of the situation, more and more companies are trying from the past,"dominance"ownership Structure into"Share Balancing" structure. However, it overcomes the drawbacks due to the dominance of the company also brought the inevitable emergence of its additional product-control over income, and brings a lot of competition for control over the proceeds, unfortunate is that even the participation by the local government corporate governance is difficult to escape also. Local governments to jointly operate the company as a fight for the interests of the "battlefield", set many obstacles, seriously affecting the company's development, capital markets'normal operation and the CPC Central Committee called on regional development policy. Therefore, to explore in depth the root causes of this phenomenon and take appropriate control measures having very important significance.In this paper,the research method is case studies, selected samples of ST Northeast Expressway Company Ltd. Of a number of local government checks and balances on the type of joint control of the shares of the intervention of state-owned listed companies, they control the core of the political benefits of regional interests engaged in a fierce battle.This paper reviews the equity balance and the theory of government intervention, and then introduced the four cases such as the ST Northeast Expressway Company Ltd., ownership structure, operating performance and results of the separation.In the case study, this paper a study from three aspects:Firstly, local governments compete for control of listed companies and compete for regional interests,showing the competition of parallel non-cooperative attitude of the administrative regions, Three shareholders against each other when makeing major decisions in the company, their starting point is the local interests, personal interests, except no one to care about the interests of listed companies and the interests of small investors. Secondly,analysis point of view is the Share Balancing which local government intervented makeing the private benefits of control. When the local government put forward as the ultimate controller, the private benefits of control not only the economic aspects of the benefits which arised by the confirmed previous studies, but also political gains, includeing the policy burden and officials promoted two elements. Thirdly, the angle of separation is from the local government blocked the company in accordance with the principle of territoriality. First, contrasting the performance between the same industry of Jiangxi,GanYue Expressway Co.LTD.which is one share dominance of ownership Structure and the ST Northeast Expressway Co.LTD., concluded: local governments more control of its state-owned listed companies there were no plundered support, resulting in operating performance was lagging behind a single government-controlled concentrated equity of listed companies; secondly, that the ST Northeast Expressway Co.LTD. long-standing separation of powers and the irrational powers of management structure, the two governments sit idly,but after the territorial division the two governments show great attitude change, concluded:political gain enhanced competition in the parallel non-cooperative attitude and executives of listed companies are mostly owned by the Government to send from, they often wear many hats, the multiplicity of identities within the company led to the listing control systems and ineffective supervision and management of the executives would not achieve the proper restraints.Case discussion sections, in-depth analysis of local government conditions for the formation of the impact of equity balance, that at this stage in our internal control and external supervision, improve the legal environment is not the case, the state-owned listed companies which is control by many local governments take the Share Balancing of Ownership Structure can not achieve its theoretically predicted effect of checks and balances, multi-shareholder gains control of the fight can only lead in the fierce struggle with the plate cut into recession under the fissile position. This article concludes that the local government how to regulate competition, maintain good order for competition,and create administrative divisions and market integration, economic integration go hand in hand into the internal mechanism is the current important issues solved.