'The pressures we faced were beyond expectations,' he said in a telephone interview from Shanghai yesterday. 'It has been very hard to garner acceptance from everyone.'

Sany's proposal is seen as crucial to the success of Beijing's schemes to float about 2.08 trillion yuan in non-tradable shares, which constitute about 68 per cent of the outstanding share capital of the country's 1,377 listed firms.

The shares are perceived as a massive overhang on the equity markets and a key reason why they have languished even as the country's economy has enjoyed more than a decade of unprecedented economic growth.

Mr Xiang said there was tremendous stress on the company, as the success or failure of its proposal would set the tone for the next stage of reform.

Beijing's announcement on May 9 that four small companies, including Sany, would spearhead the scheme to free up non-tradable shares sent the Shanghai and Shenzhen stock markets into a tailspin, as investors feared a deluge of new shares would soak up precious liquidity and cause a catastrophic collapse in stock values.

To appease disgruntled shareholders, Sany last week boosted its compensation payout to minority shareholders to 3.5 shares for every 10 held, from three shares in the initial offer. The proposed cash payout of eight yuan in cash for every 10 shares was unchanged.

Mr Xiang said shareholders would vote on Sany's proposal on June 10. He said shareholder votes on proposals by the three other firms chosen to float non-tradable shares would be held by June 17.

Sany's Shanghai A shares have gained 5.5 per cent since May 9, bucking the downward trend of the broader market, which is flirting with eight-year lows.

The Shanghai Composite Index has fallen 8.1 per cent since May 9. It fell 2.03 per cent yesterday to 1,039.19 points, after the China Securities Regulatory Commission announced that it would soon select a second batch of firms to float non-tradable shares.

'Whether the first batch of firms will succeed or not is still unknown, yet the authorities can't wait to push out a second batch of firms,' said one analyst with Shanghai Yibang Investment.

The first four firms chosen for the pilot scheme - Sany, Shanghai Zi Jiang Enterprise Group, Tsinghua Tongfang and Hebei Jinniu Energy & Resources - have been small firms with relatively simple shareholding structures.

The second batch was likely to be more representative of the general market, including firms of a variety of sizes and from a cross-section of business sectors, mainland media reported yesterday.

On Tuesday, the central government issued a 10-point guideline paper urging medium-sized and large firms to prepare proposals to sell non-tradable shares.

An earlier attempt to float non-tradable shares, sub-categorised as state-owned or legal-person shares, was aborted in 2001 after the scheme prompted panic selling on the stock markets.

Additional reporting by Helen Wu and Kristine Kwok