China tightens norms on share transfers in SOEsApril 16th, 2009 - 11:55 pm ICT by IANS
Beijing, April 16 (Xinhua) China Thursday announced new regulations to tighten share transfers in state-owned enterprises (SOEs) in a bid to stop state assets ending up in private hands.
The State-owned Assets Supervision and Management Commissi–on (SASAC), the country’s state assets watchdog, said it would prohibit management staff of SOEs from transferring their shares in the company or its subsidiaries to their close relatives.
In October last year, China had issued a rule to forbid SOE middle and senior management officials to own shares in SOE affiliates, subsidiaries or other SOE-invested businesses, in order to curb state-asset losses. Those who already held such shares were ordered to transfer those interests.
“The management staff are not allowed to sell the shares to their close relatives or the companies that the relatives control,” the SASAC said in a document, which made clear the details of the October rule.
Instead, the SOEs should be the first to buy those shares, whose prices should not exceed their audited net value in the previous fiscal year, said the SASAC.
Public discontent with state asset losses and privatisation has been growing since share-holding reforms were launched three decades ago to introduce private ownership into SOEs.
Thursday’s document also specified the definition of the SOE senior and middle management staff, which include members of board of directors and supervisors. They were required to transfer shares in SOE affiliates within a year of the publication of the October rule or resign from their posts.
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Tags: beijing, fiscal year, management officials, management staff, middle management, norms, private hands, private ownership, privatisation, public discontent, sasac, senior management, share transfers, skp, soe, state assets, state owned enterprises, three decades, watchdog, xinhua