Chinese Engineering--Some Insights into Design Institutes (IV)

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The last edit to this post was made by Design Expert on 2011-7-28 at 10:42. Due to their small scale and weak competitiveness, the design institutes affiliated with Sinopec’s subsidiaries as well as those affiliated with provincial governments were not taken seriously by the State-owned Assets Supervision and Administration Commission; it was only through restructuring that they were able to benefit from the assets owned by the state. However, such windfalls do not fall on organizations like LPEC, SEI, CEI, and the nine major design institutes of the Ministry of Chemical Industry, because they perform so well and are highly competitive. The restructuring environment at that time was such that only the weaker ones had a chance. Under these circumstances, even if the leaders of those major design institutes grew extremely envious and racked their brains, submitted numerous reports and made many attempts, it was all in vain in the end – they never received an invitation to share in the feast. Among the nine major design institutes, the only one that has the opportunity to participate in sharing the leftovers is the Third Design Institute located in Hefei. The reason for this is that Huasan Third Design Institute is one of the nine major design institutes with relatively weak competitiveness and efficiency. Pick the soft persimmons and squeeze them; as a result, good luck came to Huasan Hospital. Some staff from the Third Chemical Research Institute took advantage of the situation to reap some benefits for themselves. In March 1963, through an agreement between the Ministry of Chemical Industry and the Anhui Provincial People’s Committee, the \"Huainan Chemical Engineering Design Institute of the Ministry of Chemical Industry\" was established. In March 1965, it was renamed the \"Third Design Institute of the Ministry of Chemical Industry\". Approved by the former **Economic and Trade Commission in its document No. Guo Jing Mao Qi Gai [2001] 538 dated June 5, 2001, titled \"Approval on the Establishment of Donghua Engineering Technology Co., Ltd.\", the Third Chemical Research Institute, together with Zhongcheng Shares, the Environmental Science Academy, the Provincial Technology Investment Company, and Huaihua Group, acted as sponsors to establish Donghua Engineering Technology Co., Ltd. through a sponsorship-based approach; the registered capital of this company is 50.2124 million yuan. The lead sponsor, Hua San Yuan, contributes its net assets related to engineering design and general contracting services (including production and operation equipment, design and production buildings, as well as related intangible assets such as patents, along with current assets and the corresponding liabilities). It also transfers the qualifications and services related to engineering design, technology development, and general contracting that are associated with these assets to the joint-stock company. In addition, all the professional technical personnel, as well as those involved in production, operation, and management, who are engaged in these activities, are transferred to the joint-stock company. Upon evaluation, it was determined that the total assets and total liabilities of Huasan Third Hospital invested in the joint stock company amount to 70.1065 million yuan and 29.8941 million yuan respectively, with a net asset value of 40.2124 million yuan. Converted at a ratio of 1:1, this corresponds to 40.2124 million shares, accounting for 80.08% of the total share capital of the joint stock company ； The other four sponsors contributed a total of 10 million yuan in cash, which was converted into 10 million shares at a ratio of 1:1, accounting for 19.92% of the total share capital. On July 12, 2007, Donghua Technology entered the A-share capital market, setting a precedent for design institutes in the petrochemical industry to go public. The company’s executives saw their net worth double overnight. Mr. Ding Ding, the company’s chairman, holds 600,000 shares, while other individuals hold between 50,000 and 300,000 shares each. In October 2007, the stock price reached a historical high of 134 yuan. To date, as a result of the share expansion, the value of Mr. Ding Ding’s shares has exceeded 50 million yuan. To be continued