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Regulations on registration of intended transferees

  Article 1 The regulations are prepared in accordance with the Rules for State-owned Equity Transactions of Enterprises to regulate the registration and eligibility confirmation of the intended transferees after the release of enterprise state-owned equity transfer information.

  

  Article 2 The equity transaction institution adopts principal-agent system. The intended transferees may independently choose broker members from the list of members published by the equity transaction institution on its website, sign principal-agent contract, and establish principal-agent relationship.

  

  Article 3 During the period of the equity transfer information release, the intended transferees shall entrust broker members to inquiry into relevant information and materials of the transfer target in the equity transaction institution.

  

  Article 4 The intended transferees shall entrust broker members to complete the Application for accepting equity transfer, mainly covering such contents as the basic information of the transferees, target, base price, relevant commitments, and the opinions of entrusted broker members.

  

  Article 5 The intended transferees shall, within the information announcement period, entrust broker members to submit to the equity transaction institution the application for accepting equity transfer, as well as related appendixes, acknowledge all the contents and transaction conditions set forth in the equity transfer announcement, and make commitment to observe market rules. The equity transaction institution shall register the applications of the intended transferees one by one.

  

  Article 6 The intended transferees shall be responsible for the authenticity, integrity, and validity, and compliance of the contents of the Application for accepting equity transfer and relevant materials.

  The entrusted broker members shall review the authenticity, integrity, and validity, and compliance of the materials submitted by the intended transferees, and issue opinions on verification.

  

  Article 7 Equity transaction institution shall, within two working days starting from the following day of the receipt of the application materials for accepting the transfer, review the completeness and compliance of the applications and appendixes.

  

  Article 8 Where the registered intended transferees fail to meet the transferee eligibility conditions set forth on the equity transfer announcement, or propose acceptance requirements with additional conditions, or where the materials submitted fail to meet the requirements for completeness and compliance, the equity transaction institution shall give written notice to the intended transferees through broker members, and the intended transferees shall make adjustment within two working days starting from the following day of receipt of the notice.

  

  Article 9 Equity transaction institution shall, in accordance with the transferee eligibility conditions set forth in the equity transfer announcement, review the qualifications of the intended transferees, with major contents as follows:

  (A) Whether the intended transferees make commitment to the authenticity, integrity, validity, and compliance with market rules;

  (B) Whether broker members verify materials, and whether verification opinions are specific;

  (C) Whether the right as principals of the intended transferees conforms to the transferee qualifications set forth in the equity transfer announcement and relevant requirements in the remarks and explanations.

  (D) Whether the transferee as legal entities has fulfilled necessary internal decision-making process or approval procedures pursuant to law;

  (E) Whether the credit certifications submitted by the transferee accord with the equity transfer announcement;

  (F) If the management and its related parties involve in accepting the transfer, whether they make relevant commitments and provide the certification to show the compliance of the funding for acquisition; if the legal representatives of the transfer target and the equity holder, whether they provide audit report on the economic responsibilities of legal representative.

  The transferee eligibility conditions that are not released in information announcement may not be used as the basis to confirm the intended transferee’s eligibility.

  

  Article 10 In case of the following circumstance of the management, state-owned equity of the target enterprise shall not be accepted:

  (A) Audit shows direct liability for the business performance decline;

  B) Intentionally transfer and conceal assets or affect the net assets of the target enterprise through related transactions in the process of the equity transfer;

  (C) Provide false information to intermediaries, thereby causing the distortion of the audit and appraisal results, or collude with relevant parties to drive down asset appraisal results and state-owned equity transfer price;

  (D) Failure to comply with relevant regulations, participate in the development of state-owned equity transfer plans and the determination of related asset and capital verification, financial audit, asset appraisal, base price, intermediaries, and other important matters.

  (E) Inability to provide certification of the compliance of the funding for accepting the transfer.

  

  Article 11 The equity transaction institution shall, within five working days after the expiration of the information release period, issue to the transferor the transferee eligibility confirmation opinions through broker members, giving written notice on the confirmation opinions on the eligibility of the registered intended transferees.

  

  Article 12 The transferor shall give written reply within five working days after receipt of the transferee eligibility confirmation opinions from the equity transaction institution. Where the transferor renders that the intended transferees fail to meet the transferee eligibility conditions, the transferor shall, after verification of the entrusted broker member, issue written opinions, illustrate reasons and submit relevant supporting documents. In case of no reply beyond time limit, the transferor shall be deemed to agree with the confirmation opinions of the equity transaction institution.

  

  Article 13 In case of disagreement with the intended transferee edibility confirmed by the equity transaction institution, the transferor shall negotiate with the equity transaction institution, and if necessary, may solicit state-owned assets supervision and administration institution for opinions on relevant controversial issues.

  

  Article 14 Upon solicitation of the opinions of the transferor, the equity transaction institution shall, through a broker members, issue the transferee eligibility confirmation notice to the transferee, and copy to the transferor. The said notice shall specify the amount and deadline of the transaction deposit to be paid by the intended transferees. The deadline shall be within three working days starting from the following day on which the equity transaction institution issues the said notice.

  

  Article 15 The intended transferees in compliance with eligibility confirmation shall, within the predetermined time limit, pay transaction deposit (reaching the account designated by the equity transaction institution) to the equity transaction institution, and then get eligibility confirmation after paying transaction deposit in accordance with regulations. Overdue payment of transaction deposit shall deem to waive the transferee eligibility.

  

  Article 16 If the intended transferees failing to get eligibility confirmation disagree with the confirmation, and after entrusted brokers verify the case, they may, within two working days starting from the following day of receipt of the transferee eligibility confirmation notice, propose the application for reexamination of the transferee eligibility, and the application shall illustrate the reasons for disagreement and relevant supporting materials shall be submitted. The equity transaction institution shall, within five working days starting from the following day of receipt of the application for re-examination, complete re-examination and issue re-examination opinions on the eligibility confirmation.

  

  Article 17 Where the intended transferees who have obtained eligibility confirmation requires the transferor to explain or illustrate relevant contents of the equity transfer announcement, they shall give written application to the equity transaction institution through a broker member, and the said institution shall give notice to the transferor after review. The transferor shall reply within five working days starting from the following day of receipt of the notice of the said institution. In case of overdue reply from the transferor, the equity transaction institution may suspend the transactions, and corresponding liabilities shall be borne by the transferor.

  

  Article 18 The regulations come into force as of the date of promulgation.