AsianLII [Home] [Databases] [WorldLII] [Search] [Feedback]

Laws of the People's Republic of China

You are here:  AsianLII >> Databases >> Laws of the People's Republic of China >> NOTICE OF SASAC ON ISSUES CONCERNING THE ADMINISTRATION OF THE STOCK RIGHT OF STATE-OWNED SHARES IN THE SHARE-TRADING REFORM OF LISTED COMPANIES

[Database Search] [Name Search] [Noteup] [Help]


NOTICE OF SASAC ON ISSUES CONCERNING THE ADMINISTRATION OF THE STOCK RIGHT OF STATE-OWNED SHARES IN THE SHARE-TRADING REFORM OF LISTED COMPANIES

the State-owned Assets Supervision and Administration Commission of the State Council

Notice of SASAC on Issues Concerning the Administration of the Stock Right of State-owned Shares in the Share-trading Reform of Listed Companies

Guo Zi Fa Chan Quan [2005] No. 246

The state-owned assets supervision and administration institutions of all provinces, autonomous regions, municipalities directly under the Central Government and the cities specifically designated in the state plan, the Xinjiang Production and Construction Crops, and all central enterprises:

For the purpose of boosting the share-trading reform, promoting the development of listed companies, protecting the legitimate rights and interests of investors, especially the public investors, and preserving the stability of the capital market, in accordance with the spirit of Some Opinions of the State Council on Promoting the Reform and Opening-up As Well As the Stable Development of the Capital Market (Guo Fa [2004] No. 3) and the Guiding Opinions on the Share-trading Reform of Listed Companies (Zheng Jian Fa [2005] No. 80 ), upon the approval of the State Council, the relevant issues concerning the administration of stock right of state-owned shares in the share-trading reform are notified as follows:

1.

The state-owned assets supervision and administration institutions at all levels and the shareholders of state-owned stocks of listed companies shall have a further understanding on the significance of the share-trading reform in getting rid of the defects of the securities market mechanism, improving the corporate governance of listed companies, and promoting the rational flow of state-owned assets and shall, based on the overall situation of the reform, take effective measures to promote the sound development of the share-trading reform.

2.

The state-owned assets supervision and administration institutions at all levels and the central enterprises shall, in accordance with the basic principals of ¡°being active, safe and orderly¡±, earnestly work out an overall plan for the share-trading reform of state-controlled listed companies of the enterprises concerned or in their own jurisdictions, strengthen the classified guidance for shareholders of state-owned stocks, pay attention to the organic combination of the share-trading reform and the stability of the securities market, and take a good command of the momentum of reform, the speed of development and the sustainability of market by carrying out the reform in any enterprise with mature conditions in an one-after-another manner. For a listed company that is not yet possible to reform, we should positively create favorable conditions for the reform and explore the effective forms of reform.

3.

The shareholders of state-controlled shares of a listed company shall, in accordance with the laws and regulations in effect and the relevant provisions on the share-trading reform, on the basis of widely soliciting the opinions from other shareholders of non-tradable shares as well as those of tradable shares in the A-share market, develop the plan of share-trading reform in light of the actual situations of the listed company as well as their own, and shall conduct a comprehensive feasibility study on the plan by himself or by employing financial advisors. The state-owned assets supervision and administration institutions at all levels and the central enterprises shall effectively perform their duties, offer guidance for and carry out supervision over the plan of share-trading reform drew up by the shareholders of state-owned shares of listed companies, and take effective measures, intensify the internal administration, prevent moral risks so as to prevent such crimes as any fraud, insider trading and market manipulation in the name of the share-trading reform.

4.

The shareholders of state-controlled shares of a listed company shall, when drawing up the plan for share-trading reform, fully refer to the experience of the pilot share-trading reform and, in light of the actual conditions of listed companies as well as those of share-holders of state-owned shares, actively explore the various forms of the share-trading reform; they are also encouraged to make the combined efforts of assets restructuring, resolution of the problem that controlling shareholders or actual controllers occupy the capital of listed companies, and the share-trading reform so as to improve the quality of listed companies.

5.

The shareholders of state-controlled shares of a listed company shall, when conferring on the plan of share-trading reform with the other shareholders of non-tradable shares as well as those of tradable shares in the A-share market, make sure to fully protect the legitimate rights and interests of the holders of tradable stocks, take into full consideration the actual conditions of the holders of state-owned shares, the profit-making capability of the listed company as well as the development potential, and give consideration to both short-term benefits and long-term benefits. In the meantime, attention should be paid to balancing the interests of the other shareholders of non-tradable shares and the principle of fully consulting with the other shareholders of non-tradable shares as well as the shareholders of tradable shares in the A-share market shall be adhered to.

6.

In order to adapt to the situation and requirements of promoting the share-trading reform, the duties of examining the matters concerning the administration of the stock right of state-owned shares of listed companies as held by local state-owned enterprises or any other entity shall be performed by the state-owned assets supervision and administration institutions at the provincial level (or at the level of the cities specifically in the state plan, hereinafter the same). In particular, a plan of share-trading reform of a local state-controlled listed company shall be reported to the people¡¯s government at the provincial level or of the city specifically designated in the state plan through the state-owned assets supervision and administration institution at the provincial level.

Such matters as transferring state-owned stocks of listed companies without compensation, by agreement or against the payment of debts, and changing the nature of state-owned shares of listed companies as well as any other matter concerning the administration and examination of state-owned shares shall be handled according to the relevant provisions in force.

The written reply of the state-owned assets supervision and administration institution at the provincial level on a plan of share-trading reform of local share-holders of state-owned shares as well as the feasibility study thereof shall be reported to the State-owned Assets Supervision and Administration Commission of the State Council.

7.

Prior to submission of the plan of share-trading reform of a state-controlled listed company to the Stock Exchange, the shareholders of state-owned shares of the listed company shall get the consent of the state-owned assets supervision and administration institution at or above the provincial level, as is the general principle. Before the board of directors of a state controlled or state-invested listed company is entrusted to convene the relevant shareholders in the A-share market for a plan of share-trading reform of the company, all the shareholders of state-owned shares shall obtain the written opinion of the state-owned assets supervision and administration institution at or above the provincial level. After the board of directors of a state controlled or state-invested listed company announces and holds an assembly of the relevant shareholders, the plan of share-trading reform shall be uniformly submitted by the largest shareholder of state-owned shares to the state-owned assets supervision and administration institution at or above the provincial level for approval.

8.

Before the classified voting of the relevant shareholders, the state-owned assets supervision and administration institution shall carry out an examination and make an official reply on the matters concerning the administration of the stock right of state-owned shares in the share-trading reform.

9.

When replying to the schemes of share-trading reform concerning the state-owned shares of a listed company, the state-owned assets supervision and administration institution shall examine and refer to the following materials:

(1)

The application materials concerning the share-trading reform;

(2)

The plan of share-trading reform and the feasibility study report;

(3)

A statement on the share-trading reform;

(4)

The opinions through consultation with the shareholders of non-tradable shares regarding the share-trading reform;

(5)

The previous annual report of the listed company as well as the latest quarterly report;

(6)

The legal opinions; and

(7)

Other materials.

The feasibility study report on the share-trading reform of a listed company shall include but not limited to the following contents: the lowest proportion for holding state-owned shares and the basis thereof; the basis of the plan for the share-trading reform; the appraisal and analysis of the values of state-owned shares before and after the share-trading reform; and the effect on the interests and rights of the work staff of the listed company.

10.

The state-owned assets supervision and administration institution at or above the provincial level shall, when issuing the reply on the share-trading reform concerning state-owned shares, clarify the names of all shareholders of state-owed shares, the number of shares as held, the proportion thereof in the total shares as well as the nature of the stock right concerned (state share or stated-owned legal-person share). In particular, an exclusively state-controlled entity that holds state-owned corporate shares shall give a special indication of the name of the state-controlled entity after its own name.

11.

The state-owned assets supervision and administration institutions at all levels shall, when doing a good job in the share-trading reform, actively carry out studies on the following work: firstly, we should consider setting up an indicator of market value of the controlling listed companies when carrying out the performance assessment on the shareholders of state-owned shares of listed companies; secondly, we should actively work out the specific measures for the stock-based incentives for the management personnel of listed companies. For a state-controlled listed company that has completed the share-trading reform, we may pilot the stock-based incentives for the management personnel. The measures for the implementation and assessment of the stock-based incentives for the state-controlled listed companies shall be separately formulated by the State-owned Assets Supervision and Administration Commission of the State Council in conjunction with other relevant departments; thirdly, we should earnestly deliberate the effective ways and measures to supervise after the right to trade state-owned shares being obtained.

12.

The state-owned assets supervision and administration institutions at all levels and central enterprises shall effectively perform their own duties, formulate an overall plan for the share-trading reform of state-controlled listed companies that meet the development of the area or the enterprise concerned, and at the same time, pay attention to studying all kinds of problems arising from the share-trading reform and timely report the relevant information to the State-owned Assets Supervision and Administration Commission of the State Council.

State-owned Assets Supervision and Administration Commission of the State Council

September 8, 2005

  the State-owned Assets Supervision and Administration Commission of the State Council 2005-09-08  


AsianLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback
URL: http://www.asianlii.org/cn/legis/cen/laws/nosoictaotsrossitsrolc1272