Corporate China Going Private

July 02, 2001 | BY

clpstaff &clp articles

In June, the State Council issued a law reducing State-owned shares in companies. The proceeds of the sale of these shares will be used to establish a…

In June, the State Council issued a law reducing State-owned shares in companies. The proceeds of the sale of these shares will be used to establish a social security fund. This new fund is set to become one of the largest institutional investments in China, and the operation of this fund brings issues of enhanced corporate governance to the fore.

The PRC State Council promulgated the  Provisional Measures on Management over the Reduction of State Owned Shares to Raise the Social Security Fund (Provisional Measures) on June 12 2001, effective the same day, to address two related issues ¨C reducing State-owned shares (SOS)1 in listed companies and to establish the National Social Security Fund (NSSF) with cash proceeds realized from the SOS reduction.

Reducing State-owned Shares

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