The State-owned Assets Supervision and Administration Commission of the State Council (SASAC) issued a statute Monday to regulate the ownership transfer of state-owned enterprises (SOEs).
The statute sets policies directing 10 major steps of transferring SOEs to joint-stock companies, including ratification, assets clarification and checking, auditing, assets evaluation, deal management, price-setting, fund-raising management, protection of the creditors' interests, protection of the employees' legal rights and management buy-out (MBO).
Transferring SOEs to joint-stock companies has been a crucial factor in China's economic reform. Problems like simplified and lax property evaluation often arise during the transactions due to the lack of laws or regulations.
Under the statute, SOEs can transfer their property rights through regrouping, alliance, merger and other ways, and must invite qualified asset-evaluation offices to evaluate the property concerned according to the Regulations on the Management of State Property.
The lowest price of state-owned assets should be set on the basis of the evaluation results, and take into consideration such factors as the supply and demand of the property market, the market price of the asset, accommodation of staff and introduction of advanced technology.
For listed companies, the price of state-owned shares should be set according to the company's performance and profits, and above the net asset of every share.
Money for buying the state-owned assets should be paid in one lump sum, but amortization within one year will also be accepted after approval.
The statute strictly prohibits "self-buying" of state-owned assets. Managers responsible for the poor performance of a company's operation cannot buy its state-owned assets.
Managers buying the state-owned assets of their own firms should not participate in key decisions of the property transfer, and funds raised for the deal should not be borrowed from the companies in question, or through the mortgage of the company's state-owned assets.
(Xinhua News Agency December 16, 2003)
