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for the Circular on Issues relating to Acquisition of Public Shares by Controlling Shareholders of Listed Companies under the Reform for Split Share Structure (Exposure Draft )
June 12, 2005
To assist the reform addressing the problem of split share structure of listed companies（the Reform）and protect investors' interests, the China Securities Regulatory Commission (the CSRC ) formulated the Circular on Issues relating to Acquisition of Public Shares by Controlling Shareholders of Listed Companies under the Reform for Split Share Structure (Draft for Consultation)
The Draft Circular has been published on the CSRC website: www.csrc.gov.cn and designated newspapers and magazines in a bid to solicit opinions from the investors and the public.
Please be informed that the comments on the Draft Circular may be forwarded in writing or by email to the Dept. of Listed Company Supervision of the CSRC prior to June 15, 2005.
Contact Information of the Dept. of Listed Company Supervision is as follows:
Fax: 010－88061504
Email: du_dan@csrc.gov.cn
Address: Dept. of Listed Company Supervision of the China Securities Regulatory Commission,
Tower A of Fukai Building
No. 19 Finance Street, Xicheng District
Beijing 100032 PRC
The China Securities Regulatory Commission
Issues relating to Acquisition of Public Shares by Controlling Shareholders of Listed Companies under the Reform
for Split Share Structure
Circular to listed companies,
CC.: Shanghai Stock Exchange, Shenzhen Stock Exchange, China Securities Depository and Clearing Co.,Ltd. and its Shanghai Branch and Shenzhen Branch
June 12, 2005
To take forward the reform addressing the problem of the split share structure of listed companies and maintain market stability, the following provisions are set out to address issues relating to the acquisition of public shares by the controlling shareholders of listed companies under the Reform in accordance with relevant provisions of the Company Law of the PRC and the Securities Law of the PRC:
1. For a listed company to carry out the reform of split share structure, its controlling shareholder may acquire public shares through the secondary market so as to avoid irrational share price fluctuation, to protect the investors’ interests as well as to keep good image of the company.
2. The controlling shareholder shall make simultaneous announcement of the plan for acquisition of public shares (the Acquisition Plan) and the Reform Scheme.
The Acquisition Plan shall cover the purposes & conditions of the intended share acquisition, number of shares to be acquired, and the undertakings to keep the newly acquired shares for at least 6 months following the acquisition.
3. The controlling shareholder shall carry out the Acquisition Plan in 2 months following the approval of the general meeting of the listed company on the Reform Scheme; exemption from a tender offer may be granted to the controlling shareholder in case the intended share acquisition triggers one.
4. The controlling shareholder shall make a public announcement within 2 days the increased shares reaching each 5% of the total share capital of the listed company, and suspend the share acquisition action until such announcement is released.
5. Where shareholding distribution of a listed company changed by the share acquisition of the controlling shareholder no longer meets the listing criteria by the Company Law of the PRC, the responsible shareholder shall implement the one-month plan to maintain the listing status of the company following the 6-month period after the completion of share acquisition.
The China Securities Regulatory Commission
(This English version by Shenzhen Securities Information Co., Ltd. is for your reference only. In case any discrepancy exists between the Chinese and English context, the Chinese version shall prevail.)
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