China Securities Regulatory Commission, Relevant Requirements for Listed Companies Offering Additional New Shares Circular

Issued: July 24 2002
Effective: as of date of issue

Main contents: Any listed company that wishes to issue new shares shall have to fit the requirements set forth in this Circular in addition to those set forth in the Administration of Offerings of New Shares by Listed Companies Procedures. This Circular lays out 10 requirements that listed companies must meet, including:
- the weighted average return on equity for the last three accounting years is not less than 10% on average and the weighted average return on equity for last accounting year is not less than 10%;
- the funds raised by the additional new shares does not exceed the audited net asset value of the company at the end of last accounting year;
- the asset-liability ratio in the last financial statement and the previous year before the issue does not fall below the average for listed companies in the same industry;
- the completion of the investment project using funds raised by last issue does not fall below 70%; and
- listed companies that have undergone major asset restructuring and are applying for their first new additional issue after the restructuring shall have a weighted average return on equity for the last three accounting years of not less than 6% on average and a weighted average return on equity for last accounting year of not less than 6%.
Related legislation: Administration of Offerings of New Shares by Listed Companies Procedures, Feb 25 2001, CLP 2001 No.4 p24 and Several Questions Concerning Major Asset Purchases, Sales and Exchanges by Listed Companies Circular, Dec 10 2001, CLP 2002 No.1 p13
Repealed legislation: Article 2 of the Making Proper Work for Offerings of New Shares by Listed Companies Circular, Mar 15 2001