Shanghai Jahwa Group Co's listed unit - Shanghai Jahwa United Co - held a shareholder meeting last week at which Ge Wenyao, the company's once-and-future chairman, reached a compromise with China Ping An Trust Co, Jahwa Group's controlling shareholder. According to Ge, who was dismissed from Jahwa several days ago, he will soon return as the listed unit's chairman and work on repairing relations between the cosmetics maker and its majority stakeholder.

Local media reports say that the State-owned Assets Supervision and Administration Commission (SASAC) of the Shanghai Municipal Government stepped in to mediate the dispute - which explains why the two sides changed their acrimonious tunes so quickly.

Obviously it was the government's administrative authority rather than shareholders' interests which ultimately settled this highly-publicized conflict. But the question needs to be raised: should the SASAC have the right to intervene on the internal affairs of a company when tensions flare up?

The author is Zhou Junsheng, an economic commentator.