英文: China suspends sale of state shares The government is giving up plans to sell off state shares in listed companies via the stockmarkets, whose proceeds had been destined to fund the social security system, the China Daily and other state media reported.
The China Daily said that the State Council formally cancelled a provisional regulation requiring that listed companies sell state shares via IPOs and additional share offerings.
The requirement, however, still applies to Chinese firms seeking an overseas listing, it said.
"The sale of state-held shares is an important reform move that is moving in the right direction," the newspaper said, citing an official Xinhua news agency quote from a joint spokesperson for the finance ministry and the China Securities Regulatory Commission.
"(However), it is hard to formulate an appropriate plan that is systematic and widely accepted by the market in a short time," the spokesperson said.
The issue of state share sales has been a constant cause of concern in the markets, pressuring prices on the prospect that the government would seek to raise as much money as possible for the underfunding social security system.
Analysts quoted by the China Daily said the latest news, which follows several previous halts and modifications to the plans, is likely to boost the markets which have been weakening steadily this year. their weighted average return on net assets for the previous three accounting years is no less than 10 pct, and if their weighted average return on net assets in previous accounting year is no less than 10 pct.
When calculating its return on net assets, the company must use whichever figures are lower -- the weighted average return on net assets or the weighted average return after exclusion of extraordinary items.
The company may only launch an additional offer if its gearing is above the average level for all listed companies in the same industry. The company must also show that it has achieved 70 pct completion of previous investment projects funded via previous share issues. If a company intends to launch an additional offer in which the quantity of offered shares exceeds 20 pct of the company s existing issued shares, the firm must have the approval of more than 50 pct of the holders of its listed shares. The company must also show that there have been no problems with its management structure over the past year and must show that its accounting policy has been consistent and it does not have large debts. It must also show that it has not deviated by a large degree from investment plans outlined in previous share offer prospectuses.
If a company company s earnings 0drop by 50 pct or more after an additional offer, the offer s main underwriter will have its underwriting business curtailed or suspended.
If a company already has approval to launch an additional offer, but does not qualify to launch an offer under the new rules, the firm may switch to launching a rights issue as long as it meets the relevant requirements.