On July 24, over 10,000 workers from the Tonghua Iron and Steel Group (TISG), Jilin Province, protested the government’s decision to allow a private company, the Jianlong Group, to take control of the company. Jianlong’s newly appointed General Manager, Chen Guojun, who threatened to fire all current employees, was beaten by angry workers and died. The Jilin Province government immediately announced that the merger would stop. Workers used firecrackers to celebrate their "victory".
In 2005, Jianlong owned 36% of TISG. But it experienced a huge loss in 2008. In Q1 2009, its loss was 1 billion yuan. Jianlong managed to exit from TISG. TISG immediately became profitable. By June 2009, it had 60 million yuan in profit. In July, Jianlong managed to take back ownership of 60% of TISG. That triggered the event. It’s a failed M&A instance of a private firm trying to acquire a state-owned enterprise. Employees are leery about the government selling the nation’s properties and ignoring the workers’ interests. There is also a question about Jianlong’s ability to easily exit from TISG, and then regain ownership of TISG.
Source:
[1] BBC Chinese, July 28, 2009
http://news.bbc.co.uk/chinese/simp/hi/newsid_8170000/newsid_8171700/8171701.stm
[2] Epoch times, July 26, 2009
http://www.epochtimes.com/gb/9/7/26/n2602653.htm