Study Of The Laws Of The State-owned Trust Of The Management Buyout Program

Management Buy-out (MBO) was first observed and named by the scientists of Britain from the practice of Merger and Acquisition (M&A) and Reorganization of enterprises. In the past two decades, MBO was regarded as an effective way of reducing Agent-cost, and was introduced into China under the background that "state-owned enterprises shall do something and stop doing something" in the late 90's. In the developed countries, MBO is just one of the many ways of M&A, and is usually carried out as Leveraged But-out by dint of all kinds of Financial Derivative Instruments. In China, MBO is mainly used in the reorganization of state-owned enterprise at present. Since the finance market is under the strict supervision of the state and there are not enough Financial Derivative Instruments, MBO in China has many Chinese characteristics.This thesis reviews the social and economic effects brought by MBO to the developed countries and summarizes the features of MBO in China, and also affirms its positive effects in deepening reform. This thesis also lists several schemes which have actually been used in some MBO cases, and analyzes them from several legal aspects, such as the legality of the subject, the principle of purchase price determination, the money source and the equality to the middle and small stockholders, and also points out their deficiencies.As the author regards, the parties in the MBO aiming at the state-owned enterprise must observe all the laws and regulations relevant to the state-owned assets transfer, and shall utilize the trust and investment companies as financing platform. Based on the relevant laws and regulations and the trust mechanism, the author designs a complete MBO plan, and demonstrate its legality and rationality on several key points.