The Chinese State-owned Enterprises’ MBO Financing And Legal Regulation

At the beginning of the21st century, in order to get rid of company operational difficulties, the Chinese government decided to transfer a part of state-owned enterprises’ stock rights to manager. As a consequence, a MBO fever spread. However, because of the defective legal rules and government intervention, some illegal operationsappear in MBO. And some people think that manager make the state’s money their own. In2005, State Asset Management Commission and Ministry of Finance jointly published some rules to strictly regulate MBO which became less popular suddenly. In November2013, the third meeting of the conference communique Communist Party of China Central Committee adopted at its eighteenth noted that it encouraged developing the mixed ownership economy and promoting state-owned enterprises to perfect the modern enterprise system. In February2014, Sinopec announced that they would audit, evaluate and recombine the assets and liabilities of product sales business sector, and bring social and private funds in to make the mixed ownership come true. So MBO maybe will popular again recently. Based on the current economic market environment and legal environment, combined with the nonstandard behavior in MBO financing link and referred to the European and American countries MBO financing experience, this text discusses the new era of MBO financing in our country.The article is divided into four chapters:Chapter Ⅰ:MBO andMBO financing. Comprehend the concept of State-owned Enterprises’ MBO and State-owned Enterprises’ MBO financing, and understand the MBO’s development process in other countries.Chapter Ⅱ:The MBO financing and existing problems in our state-owned enterprises. Study our MBO financing model and legal regulation, then points out the problems existing in our MBO. Chapter III:Foreign enterprise MBO financing mode and legal regulation. Study the foreign MBO financing model and legal regulation, in order to extract the foreign successful experience.Chapter IV:The countermeasures of China’s state-owned enterprise’s MBO financing. Make some suggestions for solving the problem of China’s state-owned enterprise’s MBO financing.The innovations of this article lie in:First, combine the MBO financing and current China’s actual conditions to find the suitable mode of MBO financing of China’s state-owned enterprises. Second, enacted specialized law of MBO to regulate the operation.