GDMM 公司业务法律风险防范问题研究

Chapter One   Introduction

1.1 Research Background and Significance

1.1.1 Research Background

With  the deepening reform of state-ow ned  enterprises and state-owned assets management system, a better enterprise legal risk prevention system is not only necessary for construction  of  modern  enterprise  system,  participation  in m arket competition  and improvement of reform and development of state-owned enterprises, but also indispensable to the enhancement of state-owned assets supervision and value preservation or appreciation.

Business operation of enterprises. After the 2008 international financial crisis, China has adopted  a series of macro-c ontrol  policies to t ackle  economic  cyclical  fluctuation and maintain growth, such as proactive fiscal policy and prudent monetary policy and government investment policies. Fuel by a series of intern al and external factors including the decay of demographic  dividend,  the risks accum ulated  from  “middle  income  trap” and the deep adjustment  of international econom ic,  China’s  economic  development  is entering a “new normal”  in recen t  years. The natio n’s economy  has entered a new stage sin ce  2015, the linkage between major economic indicators deviates from each other, the economic growth continues to go downward and the C PI remains at a slow place, enterprise see declined profit margins and state-owned enterprises in industrie s like steel, coal and nonferrous metals, ect are  haunted by severe overcapac ity  which has  led to  major  losses.  Faced  with the “new normal”,  enterprises should tackle the curren t  macroeconomic  situation carefully,  analyze in-depth the hot and tricky issues that may lead to disputes and get prepared for potential such disputes, and safeguard the legitimate rights and interests through legal means if necessary to ensure the smooth production and business operation.

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1.2 Research Contents

1.2.1   Research Design

This  study gives a brief introduction of theori es  and concepts of enterprise risk and enterprise  legal risk,  and  analyzes three m ajor  categories  of  legal risk events GD MM  has suffered,  including credit even ts,  bills  of ladi ng  events and legal ris k  event of fraud. The author  then comes  up with the  specific  causes of such type  of  events through an in-depth analysis and summarizes the legal risk prevention measures against various causes to establish a complete enterprise legal risk prevention system.

This paper is comprised of five chapters:

Chapter  one is the  Introduction.  The author gives an  introduction to the research background  and significance, objectives, m ethods  and  technical courses  of  this study.  The main purpose is to explain the starting point of the research. 

Chapter two studies the theories of enterprise legal risk. T he author elaborates on the concept, characteristics, causes and class ification of enterprise risk and  enterprise legal risk. This  part is the theoretical  foundation of the f ollowing discussions  and a summary of the status quo of dom estic and overseas research on  enterprise risk and enterprise legal risk the theories and concepts derived from the research. 

Chapter three discusses the status quo of legal risk in GDMM. Based on an outline of the company’s  profile, a representation of the  specific  cases of legal risk even ts,  and a classification of the risks in light of the risks of the legal aspects, the author clarifies the status quo  of legal risk of the com pany  and sum marizes  the current characteristics of risk prevention.

Chapter four is an analysis of the legal ri sk of GDMM. Through an in-depth analysis of three types of risk events, the author manages to identify the root causes of credit events, bills of lading events and legal risk event of fraud and the defects in legal risk prevention. 

Chapter five is targeted at the legal risk prevention of GDMM. The author puts forward legal  risk prevention m easures for the co mpany  from  the institutions  establishment,  institutional improvement, information system construction and corporate culture cultivation based on the causes and working  mechanism of legal risk in an attempt to establish a sound legal risk prevention system. 

See Figure 1-1 for the research design of this study. 

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Chapter Two   Theories of Legal Risks

2.1 Theories of Enterprise Risk

Though  enterprise risk m ay  eventually  lead to legal ri sk  and correspondent legal responsibility,  enterprise risk  still reveals itself in  different  forms  in the early s tage  and is rooted from varied causes. A review of enterpri se risk is indispensible in order to study the prevention and control of enterprise legal risk. 

1)  Categories of enterprise risk

a. Enterprise risk can be divided into risks that can be analyzed  quantitatively and risk that can not be analyzed quantitatively based on  the feasibility of quantitative analysis of the risk;  b. enterprise risk can be  divided  into the risk a rising  from  internal  factors  and  risks arising  from external factors based on the sour ces  of the risk; c. enterprise ris k  can be categorized into major risk, moderate risk and minor risk based on the  impact of the risk; d. enterprise  risk can  be  divided  into hi gh-frequency  risk,  median-frequency  risk an d low-frequency risk by the frequency of occurrence; e. enterprise risk falls into long-term risk, medium-term risk and short-term risk based on the  duration; f. enterprise risk can be rated as controllable risk and uncontrollable risk depending on whether the risk can be influenced and controlled  by enterprises; g. enterprise risk  falls into human resource risk, capital risk, equipment  operation & production process risk, m aterial  risk, product risk, technical risk, information  risk and intellectual property ri sk  based on the factors of production the enterprise  actual n eeds  ect; h.  enterprise  risk can be m ade  into  material  procurement risk, financing  risk, investment ris k,  manufacturing  risk, m arketing  risks,  arrears recovery risk, accounting  risk, security risk, technical activ ity  risk, personnel activity risk, inform ation system risk and organizational reform risk according to the main activities of the enterprise or the  main  operation process; i. en terprise  risk  can be classified as s uppliers-related  risk, procurement  risk, production risk, m arketing  risk  and custom er-incurred  risk based on the sequence of supply chain. 

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2.2 The Concept of Legal Risk 

On  the “ris k”  theory,  “anthropologists  and  cultural scholars represented by Mary Douglas and Wilde ·Jaworski defined risk as the percepti on of danger of a community . It is the  intrinsic function of the so cial  structure, whic h  is to distinguish  the danger in the environment of the community”. The Sociologis t Luhmann had quite sim ilar definition, just stressed that risk came into existence in the brand new late 20th century due to the emergence of new problems. While Baker stated in his writ ings that risk was a system atic approach to deal  with disasters triggere d  and brought about by the mode rnization.  Setting aside the incomprehensible theories on “risk” in sociology, the author strives to analyze risk in popular expressions and chooses “uncertainty” to describe the concept of “risk”, and distinguishes the concept of danger, disaster and threat based on the exceptionally close relations between those terms. That helps to understand the concept of “risk” from the essence. However, those terms differ  slightly as  “uncertainty”  is  subjective  while  “risk”  is highly  objective.  Sociological theories define risk as: “the possibility of  harm the individuals and groups m ay encounter in the  future  and  their judgment  and  perception of this possibility .”  Risk can be divided into political risk, economic risk, social risk and personal risk, etc. based on the distribution of risk, while  law which is  a  part  of  social  superstructure  is the subjectiv e  aspect of social development, thus its regulatory effect in social life inevitably leads to risk —legal risk. 

To study and establish a scientific legal risk prevention system, we must understand legal risk first. Currently, the word “legal risk” refers specifically to th e risk generated by certain specific legal issues in most cas es. For instance, irregularities in a con tract cause the risk of over-weighted  liability  of  default,  and som etimes  the sem antic  meaning of  legal risk is equivalent to that of legal issues, legal risk of litigation which ac tually refers to procedural and substantive legal issues involved in li tigation is a good exam ple. While, under another meaning,  legal risk specifically refers to th e liability the party involved shall bear ,  which actually refers to the adverse consequence arising from the legal risk rather than the legal risk itself.

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Chapter Three  The  Business operation Legal Riskin GDMM .................... 17

3.1 GDMM Company Profile ........... 17

3.2 Typical Legal Risk Events of GDMM ........... 18

Chapter Four  The  Causes Analysis .................. 27

4.1 The Causes of Credit Events ............... 27

4.2 The Causes of Bill of Lading Events .................. 29

Chapter Five   Legal Risks Prevention of GDMM ..................... 35

5.1 Improvement of Legal Risk Management and Supervision Mechanism ....... 36

5.1.1 Employment of Enterprise Legal Adviser ................ 36

Chapter Five   Legal Risks Prevention of GDMM

5.1 Improvement of Legal Risk Management and Supervision Mechanism

The actual prevention of legal risk depends on every staff in the enterprises; therefore the executive bodies of risk prevention shall be d efined in order to establish an enterprise legal risk prevention system. The legal risk m anagement institutions of the company should be set up to establish the legal risk prevention system.

5.1.1 Employment of Enterprise Legal Adviser 

In  2004, the state-owned assets supervision  &  administration  commission  of the state council (SASAC) issued Administrative Regulation on State-owned Enterprise Legal Adviser Management and made it clear that “lar ge state-owned enterprise should set up specialized legal affairs agencies, the sm all and medium-sized enterprise according to its own business needs decide whether to set up agencies, and pr ovide explicit legal norm s for enterprises in the establishment and improvement of the working mechanism of law. Enterprises should set up legal agencies accordingly to lay the institutional foundation for legal risk control.

In the Administrative Regulation on State-owned Enterprise Legal Adviser Management issued  by  SASAC, the state has stipu lated  the status of seni or  executives  and th e responsibility  of com prehensive  legal af fairs  management  of the chief legal advisor in state-owned  enterprise through legislation. T he  chief legal advisor in the state-owned enterprise directly involves in the business operation decision-making process. The chief legal advisor shall be responsible for the legal repres entative or general manager of the enterprise and should guide and handle legal af fairs of the enterprise in an all-round way to ensure the compliance of operating decision. Meanwhile, includ ing the chief legal a dvisor as enterprise operation decision makers also means that decision-making of the enterprise is carried out in a more compliant way, which may prevent the legal risk in an effective way. 

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Chapter Six   Conclusion And Expectation

The development of economic globalization and the emergence of the concept of rule of law  demand  that state-owned enterprises sha ll  strengthen  the awareness of legal risk prevention. The market economy is essentially an economy under rule of law, any enterprise engaged  in  market  activities are constan tly  faced  with  legal risks,  especially  the global financial  tsunami  triggered by the U.S. subprim e  mortgage  crisis, is testing state-owned enterprises  in China in the fight against ri sk.  The business operators of the state-owned enterprise  must strengthen th e  awareness  of legal risk, seri ously  explore the m ethods  and essence of the establishment of legal risk prevention system and actively prevent and resolve legal  risk  to secure th e  maximum  benefits  for the enterpris es.  GDMM, a state-owned professional foreign trade enterprise, has got struck in major legal risks and suffered great loss in recent years. For the stable operation and futu re development of the company, it is urgent that a sound legal risk prevention mechanism shall be established within the company.

This study first digs into the enterprise risk management theoriesand risk m anagement categories  and gives an genera l  introduction into the m ajor  legal  risks of the state-owned enterprise; then the auth or analyzes the existing legal risk events of GDMM to identify the causes and working mechanism of legal risk and finally puts forward the legal risk prevention measures based on the root causes and working  mechanism of legal risk and established a enterprise legal risk prevention mechanism to serve as a guiding role in the future enterprise legal risk prevention practices to ensure the stable business development of the company. 

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