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Implementation Measures for Online Auction in the Transaction of State-Owned Property

Chapter I General Provisions

Article 1 In accordance with the Rules on the Transaction of State-Owned Property Rights and the Rules for Organizing Transaction and Contract Signing, these measures are introduced to regularize the online auction in the transaction of state-owned property.

Article 2 These rules are applicable when property rights transaction organizations organize online auction for the transaction of state-owned property.

Article 3 Defined in these measures, online auction refers to the online tendering system established by the property rights transaction organization according to the relevant agreements in the Notice of Property Rights Transaction and the particular circumstances of the bid after the release of property rights transaction information reaches its expiration date and two or more eligible bidders are found, in which the bidders transfer the bid property. The methods of online auction mainly include multiple quotes, single quote and weighted quotes, etc.

Defined in these measures, the bidder refers to the intended transferee approved to have the qualification to participate in the online auction.

Defined in these measures, multiple quotes refer to the bidding method organized by the property rights transaction organization, in which the bidders accept the transaction terms proposed by the transferor and offer dynamically increasing quotes through the online auction system established by the property rights transaction organization, the transferee being the one who offers the highest price.

Defined in these measures, single quote refers to the bidding method organized by the property rights transaction organization, in which the bidders accept the transaction terms proposed by the transferor and offer a quote within certain time limit on the online bidding system established by the property rights transaction organization, the transferee being the one who offers the highest price.

Defined in these measures, weighted quotes refer to the bidding method organized by the property rights transaction organization, in which the online bidding system weighs and grades the transaction terms the bidders have responded to according to the evaluation system published in the Notice on Property Rights Transaction by the transferor, the transferee being the one with the highest comprehensive marks.

Article 4 The property right transaction organization is the organizer of the online auction, and shall provide a market platform for the online auction and maintain the normal order of the online auction activity.

The broker member shall provide its client with business consulting, document preparation, procedure proxy and operation training related to the online auction, assist the property rights transaction organization to implement relevant rules and regulations, and resolve relevant problems occurring during the process of online auction.

Chapter II Basic Procedure of Online Auction

Article 5 The transferor and its broker member shall finish the compilation of the Implementation Measures for Online Auction in the Transaction of State-Owned Property and submit for the approval of the property rights transaction organization according to the content and relevant provisions of the Notice of Property Rights Transaction after determining the bidder and within 5 business days after the auction.

In the case of weighted quotes, upon approval by the property rights transaction organization, the preparation of the Bidding Scheme shall be prolonged.

The Bidding Scheme mainly includes the basic information about the auction property, transaction terms, methods and standards for determining the transferee, the Property Rights Transaction Agreement to be signed, and relevant responsibility, etc.

The transaction terms and other contents influencing the value of the auction property in the Bidding Scheme shall be the same as that in the Notice on Property Rights Transaction.

The Bidding Scheme shall determine a reasonable time limit for the compilation of the Bidding Document. In the case of weighted quotes, the period between the issuing of the Bidding Scheme and the submission deadline for the Bidding Document shall not be fewer than 5 business days.

Article 6 The broker member of the bidder shall assist the bidder and prepare the Bidding Document in accordance with the requirement in the Bidding Scheme.

The bidder shall promise in the Bidding Document that it accepts the transaction terms agreed upon in the Bidding Scheme, and respond fully to the essential requirements and terms set out in the Bidding Scheme.

The bidder shall be responsible for the authenticity, completeness and validity of the contents and supplementary materials in the Bidding Document, and shoulder legal responsibility for any inauthentic or dishonest statement in the Bidding Document and its consequences. If the broker member fails to verify the document closely, it shall be held responsible as well.

Article 7 The bidder shall submit its Bidding Document through its broker member to the property rights transaction organization and complete relevant bidding procedures within the time limit. The bidder shall not participate in the online auction without a valid Bidding Document. The property rights transaction organization shall be responsible for receiving and keeping the Bidding Document, and it shall ignore any Bidding Document submitted after the time limit expires.

Article 8 The property rights transaction organization shall present the Bidding Results Notice after the online auction is completed, and inform the transferor and its broker member.

The Bidding Scheme, the Bidding Document and the Bidding Results Notice are all essential elements of the property rights transaction agreement.

The transferor and the transferee shall sign the Property Rights Transaction Agreement after the online auction is completed.

Article 9 The online auction shall be terminated in case of the following situations:

1. When the application time of the Bidding Document expires, no bidder has submitted a Bidding Document;

2. All submitted Bidding Documents are invalid;

3. The number of valid Bidding Documents does not meet the required number set in the Bidding Scheme;

4. Interruption to the online auction due to force majeure;

5. Other situations where the property rights transaction organization considers applicable for termination.

Chapter II Method of Online Auction

Section 1 Multiple quotes

Article 10 The bidder shall complete the procedures and pass the authentication together with the broker member within the bidding time set by the property rights transaction organization, and log on the latter’s online bidding system. The bidder may offer a quote independently or through a broker member within the set time limit.

Article 11 The property rights transaction organization shall determine the quote responding time according to the specific circumstances of the bidding property. Generally, the quote responding time shall not be fewer than 60 seconds.

The first quote shall not be lower than the listed price. The next quote shall be higher than the former quote and become the latest quote. Every quote shall not be lower than the price markup determined by the property rights transaction organization.

Article 12 When the quote responding time is out, the bidder offering the last valid quote becomes the transferee. When the quote responding time is out, and no bidder has offered a quote, the online bidding is terminated.

Section 2 Single quote

Article 13 The bidder shall log on to the online bidding system within the bidding period through its broker member. The bidder may offer an encrypted quote independently or through its entrusted broker member on the online bidding system.

The bidder may also submit a sealed quote list to the property rights transaction organization within the bidding period in accordance with the agreement in the Bidding Scheme.

Article 14 The bidder’s quote shall not be lower than the listed price. After the bidding period expires, the property rights transaction organization shall publish all quotes offered by the bidders on its online bidding system. The bidder offering the highest quote among the eligible quotes shall become the transferee. When two or more quotes are the same, the bidder that offers the quote first shall become the transferee.

Section 3 Weighted quotes

Article 15 The evaluation system consists of the weighted indicators and the indicator scores, and is published in the Notice on Property Rights Transaction. The transferor shall set the weighted indicators and the scores of each indicator according to the comprehensive factors involved in the transaction. The property rights transaction organization shall verify the rationality of the indicator scores set by the transferor.

The weighted indicators usually include the price for property rights transaction, the settlement of employees, the handling of credits and debts, technology support and financial ability, etc. The scores for property rights transaction price are usually higher than 50 percent of the total scores.

Article 16 The validity of the Bidding Document is determined by the evaluation system of the online auction system. The Bidding Document is invalid in the following cases:

1. The Bidding Document does not conform fully to the transaction terms agreed upon in the Bidding Scheme.

2. The bidding price is lower than the bottom line set by the Bidding Scheme.

3. Other circumstances defined by the evaluation system as invalid.

Article 17 The online system of the property rights transaction organization grade the eligible Bidding Documents on the basis of the evaluation system, obtain the bidding results, and inform the transformer of the biding results through the property rights transaction organization. The bidder with the highest marks in the bidding results becomes the transferee.

Chapter IV Supplementary articles

Article 18 The property rights transaction organization, the transferor and the broker member shall bear the obligation of confidentiality for the name and number of the bidder(s) and other conditions that may affect the fairness of the competition.

The bidder and its broker member shall bear the obligation of confidentiality for the information about the transferor and the object enterprise obtained during the process of property rights transaction.

Article 19 The implementation plan of property rights transaction that requires other forms of online auction shall be drawn by the property rights transaction organization on the basis of the characteristics of the transaction project.

Article 20 These measures shall take effect as from release.

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