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Measures for the implementation of enterprise state-owned equity transfer through tendering and bidding

Article 1 The measures are prepared in accordance with the Tendering and Bidding Law of the People’s Republic of China, the Rules for State-owned Equity Transfer of Enterprises, the Regulations on Organizing Signing Transaction Contracts, and relevant regulations for the purpose of regulating the tenders and bids of enterprise state-owned equity transfer.

Article 2 The measures apply to the enterprise state-owned equity transfer conducted by the equity transaction institution through tendering and bidding.

Article 3 Tendering and bidding activities of equity transfer shall comply with relevant laws and regulations, and follow the principles of openness, fairness, justness, and trustworthiness, and selection.

Article 4 The tenderee mentioned herein refers to the equity transferor.

The bidders mentioned herein refer to the intended transferees which, during the equity transfer information release period, submit application for accepting the transfer, and obtain eligibility confirmation, and participate in the bid for equity.

A tendering agency refers to an intermediary organization which is recognized by the equity transaction institution, and specializes in business as a tendering agent.

The above principals shall comply with the equity transaction market rules.

Article 5 The tendering and bidding activities shall be organized, coordinated, supervised, and guided by the equity transaction institution. The said activities may be specifically implemented by the said institution.

Article 6 The transferor shall sign a commission contract jointly with the tending agent and the broker member of the equity transaction institution, and submit the contract to the said institution for record. In such a contract, the following particulars shall be specified:

(A) Name or title and address of the tenderee and tendering agent, and the broker member;

(B) Basic information of the tendering target;

(C) Time and place of the tendering;

(D) Commission, method and term of payment;

(E) Method and term of payment of the transaction price;

(F) Liabilities for default; and

(G) Other agreed-upon matters.

Article 7 The general procedures for tendering:

(A) Preparation of tender documents and invitation for bid;

(B) Submitting the tender documents and the invitation for bid to the equity transaction institution and the tenderee for examination;

(C) Giving invitation for bid;

(D) Clarifying and inquiry before bid opening;

(E) Receiving the tender documents of the bidders;

(F) Bid opening;

(G) Evaluation of the bid made by the bid evaluation committee based on evaluation methods;

(H) Bid evaluation committee proposes evaluation report, and recommends candidates for bid winners;

(I) The tenderee determines the bid winner;

(J) Submitting valuation reports and bid results to the equity transaction institution for review;

(K) The tenderee and the bid winner sign an equity transaction contract.

Article 8 The tender documents shall contain the following contents:

(A) Bidding requirements: including the name and the location of the transfer target, detailed requirements for preparation and submission of the tender documents, time and place for bid opening, bid validity period, bid bond limit, payment method, refund time and way;

(B) The format of the equity transaction contract and major articles;

(C) Detailed description of the transfer target;

(D) Transferee conditions; prompts marks shall be indicated for important conditions for business and accepting the transfer;

(E) Bid evaluation principles, standards and methods, and invalid bid conditions;

(F) Proof of relevant qualifications bidders are required to provide;

(G) Format and preparation requirements of the tender documents.

Article 9 Tendering agent and broker member shall, generally within five working days after the signing of the commission contract, prepare tender documents and invitation for bid in accordance with the equity transfer announcement and relevant provisions, and submit to the equity transaction institution and the tenderee for review. The said institution shall, within three working days after receipt of the tender documents, work with the tenderee to review the documents, and give written review results to tendering agent and broker member.

Article 10 Upon review of the tender documents, the tending agent shall issue invitation for bid to the intended transferees having received eligibility confirmation.

Article 11 The bid evaluation principles, standards and methods, and other relevant contents in the tender documents shall be consistent with such contents as bid evaluation methods and weigh setting in the equity transfer announcement, and the agreed-upon deposit shall generally not be more than 30% of the listed price.

Article 12 The tender documents shall, based on the actual situation of the transfer target, reasonably determine the time necessary for the preparation of he tender documents, and it shall generally not be less than ten working days from the delivery of the tender documents to the deadline.

Article 13 The tenderee and the tending agent may, in accordance with the actual situation and the requirements of the bidders of the tendering project, organize bidders to make a field survey of the transfer target.

Article 14 The tenderee, broker member, tendering agent, and equity transaction institution shall be obliged to keep confidential the names and number of the bidders, and other information that may affect fair competition.

Article 15 In case of the following circumstances after the tendering agent delivers the tender documents, the tenderee may terminate the tendering procedures:

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

(B) Tender documents submitted by the bidders fail to meet requirements for tendering documents, and 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 tender documents, and the equity transaction institution agrees to terminate the tendering;

(D) The regulatory body of the equity transaction institution proposes the termination of equity transfer through tendering in accordance with relevant regulations.

(E) Abnormal operation of tender activities due to force majeure;

(F) Other circumstances for termination stipulated in the tender documents.

Article 16 The bidders shall entrust broker members to prepare bid documents in accordance with the requirements set forth in the tender documents. The bid documents shall completely respond to the substantive requirements and conditions proposed in the tender documents.

Article 17 The tender documents shall include but not limited to the following:

(A) Bid letter;

(B) Tender offer and price payment method, payment period, performance bonds, etc.;

(C) Transferee plan (such as plans for employee allocation, disposal of creditor’s rights and liabilities, enterprise asset restructuring, and long-term development plan);

(D) Relevant qualification documents of the bidders;

(E) Other documents that shall be submitted in accordance with the tender documents.

Article 18 The data and evidence materials provided in the tender documents shall be detailed and accurate. The bidders shall be responsible for the authenticity, integrity, and validity of the tender documents, and appendixes, and shall bear legal liabilities for the consequences arising from any inauthentic data or unfaithful statement.

Article 19 The tender documents shall contain complete contents prepared in explicit writing, and shall be signed, bound, and sealed in accordance with the requirements of the tender documents, and shall be delivered in accordance with the time, place and method stipulated in the tender documents. The documents failing to meet the above requirements will be refused.

The above requirements of the tender documents will be rejected.

Article 20 Where the bidders fail to pay deposit in accordance with the requirements of the tender documents, their bid documents will be refused.

Article 21 Before the deadline to submit the tender documents, the bidders may, in writing, supplement, modify or withdraw the tender documents that have been submitted, and the contents of supplement and modification shall be integral part of the bid documents.

Article 22 Bid opening shall be conducted at the same time as the deadline to submit the bid documents as set forth in the tender documents. The place for the bid opening shall be that pre-determined in the tender documents.

Article 23 Bid opening shall be chaired by the tendering agent. Before the bid opening, the sealing of the bid documents shall be checked by the bidders or their elected representatives, and may also be checked and notarized by the notary office entrusted by the tendering agent; if confirmed without errors, the sealing shall be opened in public, and the names, bid letters, bid price, and other major contents of the bid documents shall be announced.

Bid opening process shall be recorded and filed by the tendering agent for reference.

Article 24 In case of the following circumstances, the tender documents become null and void:

(A) The bid documents fail to respond to the transferee requirements set forth in the tender documents;

(B) The bid price is lower than the base price stipulated by the tenderee;

(C) Other cases stipulated in the tender documents that the bid documents become null and void.

Article 25 Bid evaluation period runs from the bid opening to the bid-winning notice, and bid evaluation shall be confidential.

Article 26 The bid evaluation committee shall be responsible for bid evaluation. The bid evaluation committee consists of relevant experts and tenderee representatives invited by the equity transaction institution and the tendering agent along with the tenderee in accordance with the actual situation of the transfer target, on the principle of fairness, justness, and profession suitability. The number of the committee members shall be odd above 5, among whom, the number of tenderee representatives shall not be more than 1/3 of the total. The member list shall be kept confidential before determining the bid evaluation results.

Article 27 For the members of the committee and the bidders, if they are stakeholders, the members shall evade.

Article 28 The bid evaluation committee shall, in the process of bid evaluation, independently exercise the right to review, and no entity or individual is allowed to interfere with and affect the evaluation process and results.

Article 29 The bid evaluation committee may require the bidders to give necessary clarification or explanation of the ambiguous contents in the bid documents, and the bidders shall make written clarification or explanation. The clarification or explanation shall not exceed the scope of the bid documents or change the substantive contents of the bid documents.

Article 30 The committee members shall follow the contents of and standards for bid evaluation set forth in the tender documents, and observe the bid evaluation principle of justness, fairness, and selection to independently assess and score the bid documents submitted by the bidders, and give written review opinions. Candidates of bid winners shall be recommended by the committee.

Article 31 The bid evaluation shall generally be finished within three working days after bid opening.

Article 32 The tendering agent shall, within two working days after the conclusion of the bid evaluation, sort out the bid opening and bid evaluation records and relevant materials, and shall, based on the review results, prepare bid evaluation report attached with the ranking of the recommended bid-wining candidates, and submit the report to the equity transaction institution.

Article 33 The equity transaction institution shall promptly give the tenderee the notice on bid evaluation report and bid-wining candidates. The tenderee shall, in accordance with the written bid evaluation report and recommended bid-winning candidates proposed by the tendering agent, determine the bid-winning candidate ranking first as the bid winner, and give written notice to the bid winner, its broker member, equity transaction institution, and tendering agent.

Article 34 After the bid winner is determined, the bid-winning results shall be published on the website of the equity transaction institution. Meanwhile, the tenderee shall give written notice on bid result to all the unsuccessful bidders and their broker members.

Article 35 After the delivery of the bid-winning notice, the deposit of the bid winner may be transferred as equity transaction price. The equity transaction institution shall, within three working days starting from the following day of the conclusion of the tendering and bidding activities, refund the deposits of other bidders in original amount.

Article 36 The tenderee and the bid winner shall, within three working days starting from the date of the delivery of the notice on the tendering result, sign the equity transaction contract in accordance with the requirements of the tender documents and the commitments of the bid documents. The tender documents and bid documents are integral part of the said contract.

Article 37 The settlement of the bid deposit, transaction price, and commission occurred in the on-floor tendering and bidding activities of the equity transaction institution shall be made in a uniform manner. The said institution shall issue equity transaction receipt after review of the equity transaction contract.

Article 38 Where, after the delivery of the tender documents, the tenderee colludes with the bidders, terminates tender process at random, modifies tendering results, and signs no equity transaction contract with the bid winner; the tenderee, the bidders, and the tendering agent collude with each other and violate the bid evaluation principle in determining the bid winner; where the tenderee and the bidders affect the justness of the bid evaluation results by illegally interfering with the normal bid evaluation of the bid evaluation by various means, they shall bear corresponding legal liabilities.

Article 39 Where the tendering agent discloses relevant information and data that shall be kept confidential and that are related with the tendering activities, and colludes with the tenderee and the bidders to impair national and social public interests, or the legitimate rights and interests of others, it shall bear corresponding legal liabilities.

Article 20 In case of the following circumstances where the bid security submitted by the bidders is insufficient to cover indemnity for losses to the suffering party, the said party shall have the right to further investigate into the economic and legal liabilities of relevant responsible parties:

(A) After the deadline to submit the bid documents, the bidders insist on canceling the bid documents that they have submitted;

(B) The bidder gives up accepting the transfer target after being determined as the bid winner;

(C) The bidder fails to sign an equity transaction contract with the transferor after being determined as the bid winner;

(D) The bidder colludes with the tenderee and other bidders to impair national and legitimate rights and interests and those of others;

(E) The bidder adopts such unfair competition actions as exerting impact on or giving bribery, thereby affecting the justness of the tender procedures and results.

(F) Other circumstances required by laws and regulations.

Article 21 Where the tenderee, the bidders, the tendering agent, and broker members intentionally provide inauthentic data, false evidence materials, or conceal major events, they shall bear corresponding legal liabilities pursuant to law.

Article 22 As the organizer of the equity transactions through tendering and bidding activities, the equity transaction institution shall investigate into the actions against the measures of the tenderee, the bidders, the tendering agent, and broker members.

Article 23 Upon completion of the tendering and bidding activities, the tendering agent, the bid evaluation committee and other institutions shall submit all the tender and bid documents to the equity transaction institution for record.

Article 24 The measures come into force as of the date of promulgation.

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