The Problem Of Insider Control In China Shanshui Cement Group Limited's ESOP Trust

Modern ESOP in China emerged and gradually developed with the reform of state-owned enterprises and the planned economy to the market economy transition process.Over the past 30 years,China's ESOP has experienced repeated and the corresponding business practices there have been large fluctuations.Under the current state-owned mixed system reform,the ESOP has been put forward again,more and more enterprises have begun to design employee shareholding program.Based on the case study of the China Shanshui Cement Group Limited,this paper puts forward the insider control problem caused by the management through the ESOP after the state-owned enterprise's reform.It provides the relevant risk for the design of ESOP in the new round of state-owned enterprise reform.And put forward relevant suggestions,hoping to provide reference for optimizing the design of ESOP,so that the ESOP in the state-owned enterprise reform to play an effective role in the real.This paper chooses the problem of insider control under the China Shanshui Cement Group Limited's employee equity trust as the research object,and researches and analyzes the insider control problem.First of all,this paper analyzes the pattern of the China Shanshui Cement Group Limited's employee stock ownership.By reviewing the relevant announcement,the author finds that the employee stock ownership system deviates seriously from the initial purpose in the course of implementation and creates a serious imbalance between the rights and obligations of the employee's shareholders and the trustee's management.As the trustee's management,he has become the actual control of the enterprise.Secondly,this paper analyzes the environment of insider control.Through further analysis,the author finds out that the separation of the two powers under the employee's equity trust is serious,and it forms the internal motive force of the individual's self-interest.At the same time,the lack of supervision mechanism of major shareholders,the check and balance mechanism of the main shareholders and the board bomposition which puts the actual control of people as the core constitute a favorable environment for the generation of insider control.Thirdly,under the control of the insiders,the paper analyzes the contradiction between the actual controllers and the employees and the executives,and finds that the conflicts of interest under the control of the insiders are the main cause of competition.Finally,this paper analyzes the impact of anti-takeover on the profitability and security of enterprise assets under the control of insiders,and analyzes the financial risk.I found that a series of measures taken by the management as a practical controller make a serious deterioration of assets profitability and assets security,leading to enterprises facing serious financial risks.Through the study of this case,I get the following inspiration:1.Due to the moral hazard of the natural person as the trustee of the equity trust,China should actively try and develop the stock ownership pattern of the employee with the trust institutions as the trustee.2.In the mode of management entrusted to manage the employee's equity,the relevant parties should strengthen the understanding and participation of the employee's shareholders on the relevant institutional arrangement.3.It is necessary to restrict the insider control problem which may exist after thestate-owned enterprise reform by improving the internal governance mechanism and constructing the effective control market.