The Research On The Golden Shares In The Mixed Ownership Reform Of State-owned Enterprises

Since the 1980 s, a wave of state-owned enterprises’ reform(hereinafter referred as "SOEs") has swept across the world. Except for China and Vietnam, nearly all the other countries have adopted a specific and designed path of privatization. In fact, the theory of privatization has been controversial in the international academia for a long time, with two kind of views formed, including the managerial view and ownership view. However, there is no theory which could show that the corporate performance of privatized SOEs has been independently improved by privatization and what roles have other factors played in this process. China has experienced quite a long time for the reform of SOEs, and it has not completed yet dating back to the issuance of reform and opening policy in 1978. The reform of SOEs in China has approached from delegating powers and benefits, separation of ownership right and management right, establishing a modern enterprise system, shareholding reform and so on. However, China has never tried the ownership reform of SOEs, not to mention the privatization of SOEs. In 2013, China has started its ownership reform of SOEs for the first time in history by the means of mixed ownership reform. The reason why the government chooses a way of mixed ownership reform was that compared to large-scale privatization, mixed ownership reform could cause less uncertainty. From the perspective of other countries’ experience, the history of privatization in Europe and Singapore shows that ownership reform, as a single factor, is not sufficient to improve the corporate performance of SOEs. It also must rely on the perfection of other market mechanism. Among others, the golden share has played a prominent role in the privatization history of Europe and Singapore.The golden share has been firstly created in Britain during its privatization history, with the purpose to ensure that the government could remain controlling power for in privatized SOEs within the scope of some particular fields. This golden share system has been then followed by many countries in Europe, Asia and Latin America. As an exception to "one share, one right" principle of the traditional corporate law, the golden share is merely a pro-forma share, and it does not have any economic value, but it could authorize the golden share holder to veto some certain matters in relation to national security and public interests.As a special product of privatization, the golden share mechanism plays a role of balancing the interests between public sector and private sector. It could not only attract private capital into the state-owned enterprises and promote the formation of diversified equity, but also ensure the implementation of public interest objectives of SOEs. However, the justification of golden share has been challenged in Europe when European Commission sued its member states for the violation of the general principle of free movement of capital. The European Court Of Justice has made a series of influential decisions and identified the basic principles for the application of golden share.With regarding to the China’s mixed ownership reform, the golden share system could be introduced into the reform of SOEs with commonweal characteristic. Based on the existing literatures, this article will introduce the legal characteristics of golden share and point out that the golden share is perfectly matching with the objective goal of mixed ownership reform. Meanwhile, through the study of some golden share provisions in the articles of association of privatized SOEs as well as the ECJ’s golden share decisions, this article will introduce the basic principles of the application of golden share. Finally, combined with the China’s legislative developments with respect to class shares, this article will try to give some useful suggestions to build Chinese-style gold share system.