Article 1 The Rules for Enterprises’ Capital Increase Projects (the Rules) are formulated in accordance with the Corporation Law of the People’s Republic of China and the Implementation Opinions on Further Regulating the Restructuring of State-owned Enterprises (Guo Ban Fa 2005 No. 60) to regulate the capital increase activities with China Beijing Equity Exchange.
Article 2 The Rules are applicable to capital increase behaviors of state-owned or state-controlled enterprises, and serve as the reference for the capital increase behaviors of other types of enterprises excluding non state-owned companies.
Article 3 The enterprise seeking capital increase (i.e., the financing party) and the intended investor may entrust their corporate capital increase issues to the broker member of CBEX.
Article 4 The CBEX provides the enterprise with services including receiving financing application, releasing financing information, registering investment intention, determining investor, organizing contract signing for shareholders and presenting certification documents, etc.
Article 5 Enterprises seeking capital increase shall file an information release application to the CBEX after completing relevant procedures, including internal decision, reporting for approval, financial auditing and asset appraisal, etc., according to relevant laws, rules and policies. The CBEX shall release the capital increase information.
Article 6 The financing party applying for information release shall submit the following materials to the CBEX:
- Application for Capital Increase Information Release of Enterprises;
- Business license for legal person of the financing party;
- Articles of association of the financing party;
- Internal decision documents of the financing party;
- Certificate of registration for state-owned property rights or annual inspection form of state-owned property rights registration;
- Approval documents from the competent authorities;
- Capital increase or restructuring scheme;
- Resolutions about employee settlement that shall be submitted for the approval of employee representative meeting of the financing party;
- The asset appraisal report, asset appraisal form or approval document of the financing party;
- Financial auditing report of the financing party in the last 3 years;
- Recent financial statements of the financing party;
- Letter of legal opinions;
- Other documents required by the CBEX.
Article 7 The CBEX shall examine and verify the compliance of the materials submitted by the financing party or through the broker member within 3 working days upon receiving the materials. In case of approval, the CBEX shall issue a Letter of Acceptance of Corporate Capital Increase Information Release Application to the financing party. In case of non-approval, the CBEX shall inform the financing party to supply the missing materials.
Article 8 The financing party shall be responsible for the authenticity, integrity and validity of the submitted materials. Where the financing party entrusts a broker member, the broker member shall examine and verify the authenticity, integrity validity and conformity of the materials submitted by the financier.
Article 9 The released information is mainly from the Application for Corporate Capital Increase Information Release, including the following elements:
- Basic information of the financing party;
- Major financial indicators and asset appraisal;
- Internal decision and approval;
- Important information disclosure;
- Financing terms and requirements for investors;
- Margin call;
- Other issues that need to be disclosed.
Article 10 The financing party may have necessary requirements for the investor’s qualification, good will, business circumstance, financial status, management ability and asset size, and these requirements shall comply with relevant laws and regulations of China.
Article 11 The period of information release shall be determined by the financing party, which shall not be less than 20 working days.
Article 12 The information shall be released on the CBEX website, and publicly released newspapers and magazines above the provincial level specializing in economics or finance to attract intended investors. The date of information release starts as of the date the capital increase information is published.
Article 13 When applying for the information release, the financing party may request a prolonged release of the original information when no intended investor is found when the release period expires. The period extension constitutes 5 working days, and shall be continued until the intended investor is found. However, the accumulative release period shall not exceed 6 months.
Article 14 When filing the information release application, the financing party may request a change of capital increase information and a new information release when no intended investor is found when the release period expires. The new release period shall not be less than 20 working days. The change of capital increase information shall be approved by the competent authorities, and the financing party shall submit relevant approving documents.
Article 15 Where the financing party has not applied for prolonged release or new release when submitting the information release application, the information release shall be terminated when no intended investor is found when the release period expires.
Article 16 The financing party shall not change or cancel the released information during the information release period. Change or cancellation that has to be made due to special reasons shall require approval documents from the competent authorities. The CBEX shall publish a notice on the original information release channel, which starts counting on the date of release.
Article 17 During the period of information release, the intended investor can consult relevant materials. The financing party shall accept the query from the intended investor.
Article 18 The intended investor shall file an investment application to the CBEX within the period of information release for registration.
Article 19 The intended investor shall submit the following materials when filing investment application to the CBEX:
- Application for Investment in the Enterprise Planning Capital Increase;
- Certificate of the legal person, or ID of the natural person;
- Recent balance sheet and income statement of the legal person; valid credit standing of the natural person and other legal body;
- Articles of association and internal decision documents;
- Relevant documents and certificates meeting the investment requirements;
- Other documents required by the CBEX.
Article 20 The intended investor shall be responsible for the authenticity, integrity and validity of the submitted materials. The entrusted broker member shall verify the authenticity, integrity, validity and conformity of the materials submitted by the intended investor.
Article 21 The intended investor shall meet the following requirements:
- Sound financial condition and payment ability;
- Sound business credit;
- A natural person intended investor shall have full capacity for civil conduct;
- A intended investor that is a legal person, natural person or other organization from a foreign country, Hong Kong SAR, Macao SAR, or Taiwan shall meet the Provisions on Guiding the Orientation of Foreign Investment released by the State Council and other relevant regulations;
- Other requirements set by laws, administrative laws and regulations of China.
Article 22 When the intended investor files an investment application, it is considered to have accepted the requirements in the released information.
Article 23 The CBEX shall check for completeness of the Application for Investment in the Enterprise Planning Capital Increase and the application materials within 2 working days after the investment application materials are received. Where the intended investor has not submitted complete materials, the CBEX shall inform in written form the intended investor to supply the missing materials.
Article 24 When all materials submitted by the intended investor are complete, the CBEX shall investigate and evaluate the investor according to the requirements in the released information with the financing party. Upon approval, the CBEX shall present a Confirmation of Accredited Investor Status to the intended investor.
Article 25 The Confirmation of Accredited Investor Status shall inform the intended investor of the amount and deadline of the deposit payment. The deadline is normally 5 working days starting from the following day that the Confirmation of Accredited Investor Status is issued by the CBEX.
Article 26 The intended investor shall pay a deposit to the CBEX according to the requirement in the Confirmation of Accredited Investor Status within the time limit set in the status confirmation notice. Where the intended investor fails to pay the deposit in time, it shall be considered waiver of the status.
Article 27 Where only one intended investor is found, the interested parties shall sign the Corporate Capital Increase Agreement within 5 working days.
Article 28 Where two or more intended investors are found in the process, the CBEX shall organize a tendering and bidding activity, and determine the final investor according to the Law of the People’s Republic of China on Tenders and Bids. The interested parties shall sign the Corporate Capital Increase Agreement within 5 working days after the investor is determined.
Article 29 Before signing the Corporate Capital Increase Agreement, the financing party shall fully guarantee the preemption enjoyed by the original shareholders of the enterprise according to the Corporation Law and the articles of association.
Article 30 After the investor is determined, the CBEX shall refund the deposits from the other intended investors all at once. The deposit from the investor shall be refunded after the signing of the Corporate Capital Increase Agreement. Where disposal of the deposit is otherwise agreed upon in the information disclosure or among the relevant parties, the agreement shall be followed.
Article 31 After the interested parties have signed the Corporate Capital Increase Agreement and paid the service charges, the CBEX shall present the certification documents and inform the relevant parties to take the documents within 3 working days.
Article 32 Where the financing party provides false, defective or omissive information and materials about the restructuring of the enterprise and leads to losses to the relevant party, the financing party shall be liable for the losses resulting therefrom.
Article 33 All documents on the capital increase projects shall be archived at the CBEX.
Article 34 These Rules shall be reported to the state-owned assets regulatory authority and relevant governmental departments for the record.
Article 35 The Rules shall be interpreted and revised by the CBEX.
Article 36 These Rules shall come into trial implementation as of the date of promulgation.