Legal Research On The Route Of The State-owned Shareholder’s Right Trust

One of the important way to regulate a country’s economic is national invest, and inmodern countries the presence method of most state investment is state-owned shareholder’sright. In China, with the development of the reform on state-owned enterprise(SOE), the vastmajority of state investment has been transformed into state-owned shareholder’s right,therefore, how to effectively exercise the state-owned shareholder’s right has become animportant issue during the development of our country.Accordance with the "State-owned Assets Law" and other laws, the State-owned AssetsSupervision and Administration Commissions(SASAC) is the shareholders of state-fundedenterprises, but itself is also shouldering the regulatory function, which makes it sensitive toexercise the state-owned shareholder’s right directly.Therefore, in practice there occursstate-owned shareholder’s right indirectly exercise regime which mainly is the exercise undertrust, however, the current system is still subject to excessive administrative intervention,control imbalances, low operating efficiency, loss of state assets and so on. Therefore, thisarticle attempts to analyze trust which come from the Anglo-American countries, as thecollection of many advantages, combined with the exercise status of state-ownedshareholder’s right, the domestic legal environment of trust and practical needs, building astate-owned shareholder’s right trust, which making "dual ownership" as the basis, takingstrengthen the trustees’ fiduciary duties and beneficiaries’ property relief right as the core, andhoping can find a new route to induce the state-owned shareholder’s right be effectivelyexercised.This essay is divided into introduction, main body and conclusion. According to themethod of asking, analyzing and solving, the main body is divided into five parts.The first part is the basic theory of the system on the exercise of state-ownedshareholder’s right. This part outlines the concept, meaning, legal attributes of state-ownedshareholder’s right, analyze the practice about the exercise of state-owned shareholder’s rightin recent years, and the author finds that the existing exercise under trust mode is not onlyseems illegal, but is not conducive to protecting the interests of the parties, besides,it’sdifficult to solve the problem of excessive administrative intervention, control unbalance, loss of state assets and such problems in practical exercise fundamentally. Therefore, we shouldconvert our mind, selecting a new route to solve the existing difficulties.The second part is an overview of the theory about state-owned shareholder’s right trust.This part introduces the history, concept and the basic elements of trust, then analyze thedevelopment and institutional advantages of the commercial trust, which concluded theinherent mechanism of state-owned shareholder’s right trust, that as a kind of the commercialtrust,taking "dual ownership" as the basis, then analyze the safety, efficiency and freedomvalues of state-owned shareholder’s right trust, combined with China’s national conditions.The third part mainly analyze the necessity and feasibility of state-owned shareholder’sright trust in China. In addition to its own advantages of the commercial trusts, state-ownedshareholder’s right trust can promote the separation of oversight function and exercisefunction about the shareholder’s right, thus overcoming administrative intervention; balancethe control of the company, improve the structure of corporate governance; avoid relatedtransactions and internal control, protect the minority shareholders’ interests. And theestablishment of legal system on trust, as well as the development of the theory about trust,and practical experience of state-owned shareholder’s right trust, make it possible to buildstate-owned shareholder’s right trust in China.The fourth part is the construction of the state-owned shareholder’s right trust, which isthe focus of this essay. This part analyze that in order to establish the true sense of state-owned shareholder’s right trust in China, we must overcome the conflict between "absoluteownership" and "dual ownership", otherwise it will lead to vast legal obstacles including thebelong of trust property uncertain. And bring "the coexistence of legal ownership andbeneficial ownership" of trust property right to civil law as a brand new property right,combined with be regulated by special legislation, is a reasonable way to solve this problem.On the basis of the elimination of obstacles. this part analyze how to build state-ownedshareholder’s right trust, identified five major elements of its establishment and validity, anddemonstrates the qualifications of truster,trustee, beneficiary, then conclude that: state-ownedshareholder’s right trust should be designed to be a self-benefit trust, in which both the trusterand the beneficiary are SASAC, and trust companies of strong, experienced, high-levelmanagement are the first choice of trustee. Meanwhile, the author combines the legislationand practice at home and abroad, clarify the rights and obligations of trustor, trustee, beneficiary in state-owned shareholder’s right trust, in order to make the structure of state-owned shareholder’s right trust clearer.The fifth part analyze the beneficiary safeguard mechanism in state-owned shareholder’sright trust, which is another focus of this article. The author asserts when SASAC becomesthe beneficiary, how to protect its rights and ultimately ensure the safety of state-ownedshares,achieve its preservation and appreciation has become a top priority of the design aboutthe route of state-owned shareholder’s right trust. Therefore, it is necessary to establish anadvance prevention mechanism of trustee’s fiduciary duty, as well as a post-reliefmechanisms of beneficiaries’ property relief right,so that can maximize the purpose of state-owned shareholder’s right trust be achieved, inducing the state-owned shareholder’s right beeffectively and reasonably exercised.