New phrases injected into the articles of association in recent months include describing the party as playing a core role in “an organised, institutionalised and concrete way“ and “providing direction [and] managing the overall situation“.
The changes are being billed by the companies as part of Beijing’s efforts to improve efficiency and productivity at SOEs, which account for about a fifth of the country’s economic output. The revisions followed the annual meeting of China’s rubber-stamp parliament in March, although a handful of companies altered their articles last year.
Companies acknowledging the role of the party range from state oil group Sinopec and ICBC, the world’s largest bank by assets, to steel and energy groups as well as leading brokers including Haitong Securities.
The articles of association for China Railway Group, one of the country’s biggest construction groups, now state that “when the board of directors decides on material issues, it shall first listen to the opinions of the party committee of the company“.
中国最大建筑集团之一中国中铁(China Railway Group)的公司章程现在声明，董事会决定重大事项时，应先听取公司党委的意见。
“This is a reminder to investors they are buying into a party machine,“ said David Webb, an independent investor and shareholder activist in Hong Kong. “This move to embed the party into constitutional documents of the companies puts a lie to the government’s claim they want market forces to play a greater role.“
Investors have voiced frustration with their inability to stop the changes.
“While it serves to formalise something investors were already aware of, this formalisation is not really the direction of travel investors wanted to see,“ said David Smith, head of corporate governance at Aberdeen Asset Management Asia.
“尽管这有助于让投资者已经意识到的情况正式化，但这种正式化并不真是投资者希望看到的发展方向，“安本资产管理亚洲公司(Aberdeen Asset Management Asia)的公司治理负责人戴维•史密斯(David Smith)表示。
Amendments were passed by annual general meetings as special resolutions, which require a two-thirds majority. Beijing’s majority control of these companies lowered the bar for mustering remaining votes.
Several companies recorded zero opposition to the motions. But others, including China Construction Bank, would have failed to gather two-thirds support if the state had not been able to vote.
“Of course we voted against — its like turkeys voting for Christmas,“
said one fund manager. “Sometimes the party and its plans can be in direct conflict with shareholders but what can we do? Its one step forward and one step back with China.“
The changes are causing consternation among Hong Kong regulators, but rules blocking large shareholders from voting need to involve a financial interest in the outcome. Other officials have called for more disclosure of the people running the party committees.