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Regulations on the enterprise state-owned equity transfer through online outcry

Chapter I General provisons

Article 1 The regulations are prepared in accordance with the Rules for State-owned Equity Transfer of Enterprises, and the Regulations on Organizing Signing Transaction Contracts for the purpose of regulating the online outcry for enterprise state-owned equity transfer.

Article 2 The regulations apply to state-owned equity transfer conducted through online outcry adopted by the equity transaction institution.

Article 3 The online outcry mentioned herein refers to the circumstance where upon the expiration of the equity information release period, there are two or more eligible bidders, and the equity transaction institution, in accordance with relevant stipulations of the equity transfer announcement and the specific information of the target, organizes bidders to compete for the target through the online outcry system established by the said institution. Online outcry mainly covers multiple quotation, one-time quotation, and weighted quotation.

The bidders mentioned herein refer to intended transferees participating in online outcry after eligibility confirmation.

The multiple quotation mentioned herein refers to the outcry method where, under the organization of the equity transaction institution, the bidders accept the transaction conditions confirmed by the transferor, and increase quotation in a dynamic manner through the online outcry system of he said institution, and the bidder giving the highest quotation is determined as the transferee.

The one-time quotation mentioned herein refers to the outcry method where, under the organization of the equity transaction institution, the bidders accept the transaction conditions confirmed by the transferor, and submit one-time quotation within prescribed time through the online outcry system of he said institution, and the bidder giving the highest quotation is determined as the transferee.

The weighted quotation mentioned herein refers to outcry method where, under the organization of the equity transaction institution, the online outcry system will, in accordance with the scoring system published in the equity transaction announcement, form scores of the transferee conditions responded by the bidders based on corresponding, and determine the bidder with the highest score as the transferee.

Article 4 The equity transaction institution is the organizer of the online outcry, and shall provide market platform-related services, and safeguard the normal order of online outcry.

Broker members shall provide clients with online outcry-related business consulting, document production, procedure agency, operation training, and other services, and assist the equity transaction institution with the implementation of relevant rules, and coordinate with the treatment of relevant issues in the process of online outcry.

Chapter II Basic procedures for online outcry

Article 5 The transferor and its broker member shall, within five working days starting from the following day after the bidder is determined, complete the development of the Plan For the Implementation of Equity Transfer through Online Outcry (hereinafter called outcry plan) in accordance with the contents of the equity transfer announcement and relevant provisions, and submit it to the equity transaction institution for examination. For weighted quotation, the time limit for the development of the plan may be extended appropriately.

Outcry plan mainly includes the basic information of the transfer target, transaction conditions, methods and standards for determining the transferee, equity transaction contract to be signed, and representations on relevant liabilities.

The transaction conditions in the outcry plan and other contents affecting the value of the target shall be consistent with the contents of the equity transfer announcement.

The outcry plan shall determine the reasonable period necessary for the bidders to develop tender documents. For weighted quotation, the period shall be at least five working days from the date of the delivery of the outcry plan to the deadline to provide the tender documents.

Article 6 The broker members of the bidders shall the bidders to develop tender documents in accordance with the requirements of the outcry plan.

Bidders shall make a commitment in the tender documents to accept the transaction conditions stipulated in the outcry plan, and completely respond to the substantive requirements and conditions of the plan.

Bidders shall be responsible for the authenticity, integrity, and validity of the contents of the tender documents, and appendixes, and shall bear legal liabilities for the consequences arising from any inauthentic data or unfaithful statement in the tender documents; in case broker members fail to make careful verification, they shall bear corresponding liabilities.

Article 7 The bidders shall, within the specified time, submit to the tender documents to the equity transaction institution and fulfill bidding procedures through broker members. The bidders shall provide valid tender documents before participating in online outcry. The equity transaction institution shall be responsible for receipt and preservation of the tender documents, and refuse to receive the tender documents submitted beyond time limit.

Article 8 The equity transaction institution shall, upon the conclusion of the online outcry, issue notice on outcry result based on the outcry result, and give the notice to the transferor and its broker members.

Outcry plan, tender documents, and notice on outcry result are integral part of the equity transaction contract.

Upon the conclusion of the online outcry, the transferor and the transferee shall complete the signing of the equity transaction contract.

Article 9 In case of any of the following circumstances, the online outcry shall be terminated:

(A) When the deadline expires, no bidder submits tender documents;

(B) Tender documents submitted are all null and void;

(C) The number of the valid tender documents submitted by the bidders is smaller than that set forth in the bidding plan;

(D) Abnormal operation due to force majeure;

(E) Other circumstances where the online outcry shall be terminated with the confirmation of the equity transaction institution.

Chapter III Online outcry methods

Section 1 Multiple quotation

Article 10 Bidders shall, within the outcry time specified by the equity transaction institution, work with broker members to fulfill procedures and pass identification verification, and log on the outcry system of the said institution. During the prescribed period for making a bid, the bidder may quote at their sole option, and may also entrust broker members for quotation.

Article 11 The equity transaction institution shall, based on the specific circumstances of the outcry target, determine the period for making a bid, and each period shall be generally no less than 60 seconds.

The initial quotation shall not be lower than the listed price, and next quotation shall be higher than the previous one, and become the latest quotation. Each quotation shall not be lower than the increase margin determined by the equity transaction institution.

Article 12 When the period for making a bid concludes, the bidder with the final effective quotation becomes the transferee. When the period for making a bid concludes, if all the bidders make no quotation, the online outcry terminates.

Section 2 One-time quotation

Article 13 The bidders shall, within the prescribed period, log on the online outcry system of the equity transaction system through broker members. The bidders may quote at their sole option or entrust broker members to make one encrypted quotation through the said system.

The bidders may also submit sealed and stamped quotation to the equity transaction institution within the prescribed period in accordance with the stipulations of the bidding plan.

Article 14 The quotations of the bidders shall not be lower than the listed price. After the offer period concludes, the equity transaction institution shall publish the quotations of various bidders in the online outcry system. Among the bidders with effective quotations, the bidder with the highest quotation becomes the transferee; for the same quotation, the bidder making the quotation or submitting quotation earlier becomes the transferee.

Section 3 Weighted quotation

Article 15 Rating system consists of weighted indicators and indicator scores, and shall be published in the equity transfer announcement. The transferor shall, in accordance with various integrated factors involved in the transfer target, set the weighted indicators and scores of various indicators. The equity transaction institution shall review the rationality of the transferor’s setting of the scores of the indicators.

Weighted indicators generally include the price for accepting the equity transfer, employee allocation, disposal of creditor’s rights and liabilities, technical support, and financial capability. Among them, the price for accepting the equity transfer shall generally not be lower than 50% of the total scores.

Article 16 The validity of the tender documents is up to the rating system set in the online outcry system. In case of the following circumstances, the tender documents shall become null and void:

(A) The tender documents fail to completely respond to the transaction conditions set forth in the bidding plan;

(B) Bidding price is lower than the base price set forth in the outcry plan;

(C) Other circumstances where the tender documents are invalid as is prescribed in the rating system.

Article 17 The online system of the equity transaction institution gives scores of the valid tender documents and form outcry results in accordance with the rating system, and the said institution shall give notice on the result to the transferor. Among the results, the bidder with the highest score becomes the transferee.

Chapter IV Supplementary Provisions

Article 18 The equity transaction institution, the transferor and its broker member shall be obliged to keep confidential the names and number of the bidders, and other information that may affect fair competition.

The bidders and their broker members shall be obliged to keep confidential the relevant information of the transferor and the target enterprise that they acquire in the process of equity transactions.

Article 19 Where the equity transferor needs to adopt other ways of online outcry, the equity transaction institution may, in accordance with the characteristics of the equity transfer projects, develop special plan for implementation.

Article 20 The measures come into force as of the date of promulgation.

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