Wednesday, August 12, 2009

CAS and Legend Holding's Corporate Governance

Given that the Chinese Academy of Sciences (CAS) has over 500 corporations under its umbrella, the announced goal to reduce the CAS' shares in each firm to 35% or less makes some sense since CAS can't possibly monitor all 500 firms effectively. Still, it was amusing to hear CAS state that one of the reasons it wants to sell 29% of Legend Holdings (CAS' total stake is 65%) is to improve corporate governance when it also insists that the buyer of the stake must to commit to not pressing for any change in the management or strategy of Legend Holdings for the next five years.

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