China Securities Regulatory Commission, Issues Relevant to Share Listing and Trading Conditions of Target Companies Involved in Takeovers by Offer Circular

Issued: May 20 2003

Main contents: Upon expiration of the offer period of a takeover, if the equity distribution of the target company does not comply with the listing conditions prescribed in the PRC Company Law and the purpose of the purchaser is to terminate the share listing and trading of the target company, the listing and trading of the target company's shares shall be terminated (Item One). However if the purpose of the purchaser is not to terminate the share listing and trading of the target company, the purchaser should put forward and implement a specific proposal to re-qualify the equity distribution of the target company for listing within one month after the offer has expired for six months (Item Two(2)). The stock exchange shall impose a risk warning of withdrawal of the shares of the target company and decide whether to lift the warning after the purchaser has finished implementing the aforementioned proposal (Item Two). The purchaser shall also fulfil its information disclosure obligations in a timely manner (Item Three).
Related legislation: PRC Company Law (Amended), Oct 27 2005, CLP 2005 No.10 p21; PRC Securities Law (Amended), Oct 27 2005, CLP 2006 No.1 p31 and Administration of the Takeover of Listed Companies Procedures, Sep 28 2002, CLP 2002 No.9 p43