Measures for the Administration of the Transfer of State-owned Assets of Financial Enterprises

(Issued by the Ministry of Finance on March 17 2009 and effective as of May 1 2009.)

Order of the MOF No.54

PART ONE: GENERAL PROVISIONS

Article 1: These Measures have been formulated pursuant to relevant laws and administrative regulations in order to regulate the transfer of state-owned assets of financial enterprises, strengthen the oversight of transactions involving state-owned assets, safeguard the lawful rights and interests of investors that make capital contributions in the form of state-owned assets and guard against the wastage of state-owned assets.

Article 2: For the purposes of these Measures, the term “state-owned assets of financial enterprises” means the rights and interests engendered by capital contributions made in various forms to financial enterprises by people's governments at every level and by their authorised investment entities.

For the purposes of these Measures, the term “financial enterprises” includes all enterprises and financial holding (group) companies that have obtained a finance business permit.

Article 3: These Measures shall govern the transfer by finance departments of people's governments at the county level and above (Finance Departments) and investment entities authorised by people's governments at the county level and above or authorised by Finance Departments and the transfer by state-owned and state-controlled financial enterprises (Transferors) of their state-owned assets of financial enterprises to domestic and foreign legal persons, natural persons and other organisations (Transferees).

Article 4: The transfer of state-owned assets of financial enterprises shall comply with laws, administrative regulations and industrial policy.

Article 5: Transfers of state-owned assets of financial enterprises include transfers of state-owned assets and equity of unlisted enterprises and transfers of state-owned shares of listed companies.

Transfers of state-owned assets of financial enterprises shall principally be transacted through assets and equity exchanges and securities exchange systems. Where the conditions specified herein are satisfied, the transfer of state-owned assets of a financial enterprise may be effected directly by way of an agreement.

Article 6: Title to state-owned assets of a financial enterprise that are to be transferred shall be clear. State-owned assets of a financial enterprise may not be transferred if the title thereto is unclear or disputed or if the transfer thereof is prohibited by laws, administrative regulations or relevant state policies.

The transfer of state-owned assets of a financial enterprise that are encumbered by security rights shall comply with relevant laws and administrative regulations such as the PRC Property Law and the PRC Security Law.

Article 7: The transfer of state-owned assets of financial enterprises shall be overseen by Finance Departments based on the principles of centralised policy and administration by level. When a Finance Department intends to transfer state-owned assets of a financial enterprise, it shall report the same to the people's government at the same level for approval. When a government authorised investment entity intends to transfer state-owned assets of a financial enterprise, it shall report the same to the Finance Department at the same level for approval.

If government social control or financial industry oversight matters are involved in the course of a transfer of state-owned assets of a financial enterprise, such transfer shall be reported, in accordance with state provisions, to the relevant government authorities for approval.

If the Transferee is an overseas investor, state provisions on the oversight of foreign investment shall be complied with, and the Transferor shall report the same, in accordance with relevant provisions, to the relevant government department for approval.

Article 8: Finance Departments are the departments charged with overseeing transfers of state-owned assets of financial enterprises.

The Ministry of Finance shall be responsible for formulating rules and regulations for the oversight of transfers of state-owned assets of financial enterprises and shall oversee transfers of state-owned assets of financial enterprises that are subject to the administration of the central government as well as transfers of state-owned assets of their subsidiaries.

Local Finance Departments at the county level and above shall oversee transfers of state-owned assets of financial enterprises subject to administration at the same level as well as transfers of state-owned assets of their subsidiaries.

Higher-level Finance Departments shall guide and monitor the oversight by lower-level Finance Departments of transfers of state-owned assets of financial enterprises.

Article 9: A Finance Department shall perform the following oversight duties with respect to transfers of state-owned assets of financial enterprises:

(1) deciding on or approving matters relating to transfers of state-owned assets of financial enterprises, examining matters relating to material asset transfers and reporting the same to the people's government at the same level for approval;

(2) determining the list of assets and equity exchanges that are available to handle transactions involving state-owned assets of financial enterprises;

(3) being responsible for the conduct of monitoring inspections of transfers of state-owned assets of financial enterprises;

(4) being responsible for the collection, summary, analysis and submission of information on transfers of state-owned assets of financial enterprises; and

(5) other duties as delegated by the people's government at the same level.

Article 10: If a state-owned or state-controlled financial enterprise lawfully establishes subsidiaries or invests in enterprises in China or abroad, it shall be responsible in accordance herewith for the work associated with the transfer of state-owned assets of such subsidiaries or investee enterprises and shall perform the following duties:

(1) formulating in accordance with these Measures and relevant state provisions measures for the administration of and work procedures for transfers of state-owned assets of its branches and subsidiaries and reporting the same to the Finance Department at the same level for the record;

(2) studying whether an asset transfer would be conducive to promoting the continued development of the enterprise;

(3) considering matters relating to the transfer of assets of its top-level subsidiaries and monitoring matters relating to the transfer of assets of subsidiaries below its top-level subsidiaries; and

(4) reporting relevant information on asset transfers to the Finance Department, the relevant financial regulatory departments and other relevant departments.

PART TWO: TRANSFER OF STATE-OWNED ASSETS AND EQUITY OF UNLISTED ENTERPRISES

Article 11: The transfer of state-owned assets and equity of unlisted enterprises shall be publicly carried out through lawfully-established assets and equity exchanges at the provincial level and above, and shall not be restricted by region, industry, capital contribution or parent/subordinate relationship.

Article 12: If a state-owned or state-controlled financial enterprise intends to transfer assets and equity of a top-level subsidiary, it shall report the same to the Finance Department for examination and approval. Unless it is expressly specified by the state that approval of the State Council is required, when a state-owned or state-controlled financial enterprise subject to the administration of the central government intends to transfer assets and equity of a top-level subsidiary, it shall report the same to the Ministry of Finance for examination and approval; the authority for the examination and approval of transfers of state-owned assets of financial enterprises subject to administration at the local level shall be determined by the provincial-level Finance Department.

If a top-level subsidiary (provincial-level branch, or office of a financial asset management company) of a state-owned or state-controlled financial enterprise is to transfer assets and equity that it holds in a subsidiary, examination and approval shall be carried out by the holding (group) company. If such transfer involves a key industry or material state-owned assets and equity of a key subsidiary, or would lead to transfer of the control of the financial enterprise or other key subsidiary held by the enterprise that is the subject matter of the transfer, it shall be reported to the Finance Department for examination and approval.

Article 13: The Transferor shall formulate a transfer plan and, in accordance with its internal decision making procedure, submit it to the shareholders' meeting or shareholders' general meeting, board of directors or other decision making body for deliberation and conclusion of a written resolution.

The transfer plan shall include the basic particulars of the assets and equity of the enterprise that is the subject matter of the transfer, details of the fact finding on the transfer, the announcement on the transfer of assets and equity, and other principal information.

If the issue of employee resettlement affects the enterprise that is the subject matter of the transfer, the employee resettlement work shall be carried out in accordance with relevant state provisions.

Article 14: The Transferor shall, in accordance with relevant state provisions, engage an asset appraisal firm to carry out an appraisal of the overall value of the enterprise that is the subject matter of the transfer.

Article 15: If a transfer of state-owned assets and equity of an unlisted enterprise requires examination and approval by the Ministry of Finance, the Transferor shall submit the following materials before trading on an exchange:

(1) a written application for the transfer of assets and equity, that includes the reason for the transfer, whether such transfer will be effected by way of trading on an exchange, etc.;

(2) the plan for the transfer of assets and equity and the internal decision document;

(3) the basic particulars of the Transferor and its financial accounting reports for the preceding financial year as audited by an accounting firm;

(4) the basic particulars of the enterprise that is the subject matter of the transfer, its financial accounting reports for the period and its financial accounting reports for the most recent period as audited by an accounting firm;

(5) the documents of the Transferor and of the enterprise that is the subject matter of the transfer evidencing title to the state-owned assets;

(6) the approval or record-filing document for the appraisal of the assets of the enterprise that is the subject of the transfer;

(7) the proposed assets and equity exchange;

(8) the basic conditions that prospective Transferees are required to satisfy, and the payment method;

(9) a legal opinion issued by a law firm; and

(10) other documents that the Finance Department deems necessary.

If assets and equity of a financial enterprise are to be transferred, an account shall be given as to whether such transfer complies with the provisions of the relevant financial regulatory department.

Article 16: An assets and equity exchange that engages in trading activities involving state-owned assets and equity of financial enterprises shall satisfy the following basic conditions:

(1) complying with relevant laws, regulations and rules;

(2) having appropriate trading premises, information dissemination channels and professional personnel that can satisfy the requirements of trading activities involving state-owned assets and equity of financial enterprises;

(3) having sound internal management systems and operational rules for trading of assets and equity;

(4) having the capacity to perform the duties of an assets and equity exchange and the capacity to examine the qualifications and conditions of entities involved in trading of assets and equity in accordance with the law;

(5) not having a record of violations of laws or regulations for three years in succession; and

(6) publicly disclosing information on assets and equity transactions in accordance with relevant state provisions and having the capacity, as required, to report on the trading of state-owned assets and equity of financial enterprises on its premises to the Finance Department at the provincial level or above in a timely manner.

Article 17: Once the Transferor has determined the assets and equity exchange for trading on an exchange, it shall instruct such assets and equity exchange to publish an announcement on the transfer of assets and equity in an economic or financial publication publicly distributed at the provincial level or above and on its website so as to disclose to the public information on the transfer of assets and equity of the unlisted enterprise and solicit prospective Transferees.

The announcement period for transfer of assets and equity may not be less than 20 working days.

Article 18: The information on the transfer of assets and equity of the unlisted enterprise disclosed by the Transferor shall including the following:

(1) the basic particulars of the enterprise that is the subject of the transfer;

(2) the breakdown of the assets and equity of the enterprise that is the subject of the transfer;

(3) information on the internal decision taken on the transfer of assets and equity;

(4) data on the principal financial indicators for the most recent period of the enterprise that is the subject of the transfer as audited by an accounting firm;

(5) information on the approval or record filing of the appraisal of the assets of the enterprise that is the subject of the transfer;

(6) the basic conditions that the Transferee is required to satisfy; and

(7) other matters that require disclosure.

If, in accordance herewith, examination and approval procedures need to be carried out, information on the approval of the transfer of assets and equity shall additionally be disclosed.

Article 19: A prospective Transferee shall, in general, satisfy the following conditions:

(1) having a good financial position and payment capacity;

(2) having a good commercial creditworthiness;

(3) if the Transferee is a natural person, having full civil capacity; and

(4) other conditions as specified by the state.

Provided that relevant regulatory requirements and fair competition principles are not violated, the Transferor may set specific requirements in respect of the qualifications, commercial reputation, industry access, asset scale, business position, financial position, management capabilities, etc. of the prospective Transferees.

Article 20: In an assets and equity transaction, the price initially listed may not be less than the approved or recorded asset appraisal result.

If the initial listing fails to attract prospective Transferees, the Transferor may determine a new listed price based on the circumstances of the enterprise that is the subject of the transfer and announce the same. If the new listed price is less than 90% of the asset appraisal result, approval procedures shall be carried out anew.

Article 21: If, through public solicitation, at least two prospective Transferees are found, the Transferor shall, in concert with the assets and equity exchange, conduct a review of the qualifications of the prospective Transferees and, depending on the actual circumstances of the enterprise that is the subject of the transfer, carry out the assets and equity transaction by way of an auction, invitation for and submission of bids or other public competitive bidding method specified by the state.

If assets and equity of the unlisted enterprise are to be transferred by way of an auction, such auction shall be arranged and carried out in accordance with the PRC Auctions Law and other relevant provisions.

If assets and equity of the unlisted enterprise are to be transferred by way of an invitation for and submission of bids, such invitation for and submission of bids shall be arranged and carried out in accordance with the PRC Law on Invitation for and Submission of Bids and other relevant provisions.

Article 22: If the public solicitation through the assets and equity exchange results in only one qualified prospective Transferee being found, the transfer of assets and equity may be carried out by way of a transfer agreement within the exchange, provided that the transfer price is not lower than the listed price.

If the transfer is to be carried out by way of a transfer agreement within the exchange, the Transferor shall carry out full negotiations with the Transferee and, after relevant matters involved in the transfer have been duly dealt with in accordance with the law, execute an agreement on the transfer of assets and equity (or, here and hereinafter, a contract for the transfer of assets and equity).

Article 23: Once the Transferee has been determined, the Transferor shall execute an agreement on the transfer of assets and equity with the Transferee.

The transfer agreement shall contain provisions specifying the following:

(1) the names and domiciles of the Transferor and Transferee;

(2) the basic particulars of the assets and equity of the enterprise that is the subject matter of the transfer;

(3) the transfer method, transfer price, deadline for and method of payment of the price and the payment conditions;

(4) assets and equity delivery matters;

(5) the bearing of the relevant tax obligations incurred in connection with the transfer;

(6) the method for the resolution of disputes relating to the agreement;

(7) liability for breach of contract by the parties to the agreement;

(8) conditions for the amendment and termination of the agreement; and

(9) other provisions that the Transferor and Transferee deem necessary.

Article 24: The Transferor shall timely collect the full price for the transfer of assets and equity in accordance with the agreement on the transfer of assets and equity. In principle, the transfer price shall be collected in one lump sum in the form of monetary assets. If the amount is relatively large and payment thereof in one lump sum would genuinely be difficult, payment in instalments may be provided for, provided that the time limit for such payment in instalments does not exceed one year.

If payment in instalments is opted for, the Transferee's initial payment may not be less than 30% of the total price and shall be made within five working days from the effective date of the agreement. Lawful payment guarantee procedures shall be carried out for the remainder of the price and the Transferee shall pay interest to the Transferor during the instalment period at the current benchmark rate on loans of financial institutions. The Transferor may not apply for state-owned assets and equity registration or amendment of business registration until the entire transfer price has been fully paid or the payment guarantee procedures have been carried out.

If the Transferee is to pay the price for the transfer of assets and equity in the form of non-monetary assets, the Transferor shall, in accordance with relevant provisions, engage an asset appraisal firm to carry out an asset appraisal and determine the value of the non-monetary assets.

Article 25: The Finance Department shall carefully examine the materials submitted by the Transferor and determine whether to approve the relevant matters of the transfer of assets and equity.

If, after the transfer matters have been approved, the Transferor and Transferee revise the transfer percentages of the assets and equity, or a major change is made to the plan for the transfer of assets and equity, resulting in a discrepancy with the approved matters, approval procedures shall be carried out anew by the prescribed procedure.

Article 26: If state-owned leaseholds, use rights for territorial waters, exploration rights or mining rights are involved in a transfer of assets and equity of an unlisted enterprise, relevant procedures shall be carried out separately in accordance with relevant state provisions.

Article 27: Once a transfer of assets and equity of an unlisted enterprise has been completed, the Transferor and Transferee shall, in a timely manner, carry out, in accordance with relevant state provisions, relevant procedures for registration of state-owned assets and equity on the strength of the assets and equity transaction voucher issued by the assets and equity exchange.

PART THREE: TRANSFER OF STATE-OWNED SHARES OF LISTED COMPANIES

Article 28: The transfer of state-owned shares of listed financial enterprises and transfers by financial enterprises of state-owned shares of listed companies shall be effected through a lawfully-established securities trading system.

Article 29: A Transferor shall carry out information disclosure matters relating to a transfer of shares of a listed company in accordance with relevant provisions.

Article 30: If the Transferor is the controlling shareholder of the listed company, it shall submit a share transfer plan to the Finance Department for examination and approval, following which it shall implement the same.

If a key industry of the national economy is involved, the approval of the relevant department shall be required.

Article 31: If the Transferor is a shareholder with an equity interest in the listed company and its aggregate net transfer of shares (here and hereinafter the balance remaining after subtracting the aggregate of the increases in its shareholding from the aggregate of the reductions in its shareholding) during a complete financial year is less than 5% of the listed company's total share capital, the decision shall be made by the Transferor in line with its internal decision-making procedure, and, by January 10 of each year, it shall report to the Finance Department on its transfers of shares of the listed company for the preceding financial year. If such aggregate net transfer equals or exceeds 5% of the listed company's total share capital, it shall first submit its transfer plan to the Finance Department for approval before implementing the same.

Article 32: If a Transferor is required to report a transfer of state-owned shares of a listed company to the Finance Department for examination and approval, the materials it submits shall include the following:

(1) an application letter for the transfer of shares of the listed company, that includes the reason for the transfer, the number of shares to be transferred, the holding cost, the determination of the transfer price, etc.;

(2) the plan for the transfer of the listed company's shares and the internal decision document;

(3) the basic particulars of the Transferor and its financial accounting reports for the preceding financial year as audited by an accounting firm;

(4) the basic particulars of the listed company, its annual financial accounting reports for the most recent period, and financial accounting reports for the most recent period as audited by an accounting firm;

(5) the impact of the transfer of the listed company's shares on the control of the company, the company's share price and the capital market; and

(6) other documents as specified by the Finance Department.

The Finance Department shall carefully examine the materials submitted by the Transferor and determine whether to approve the matters relating to the transfer of the listed company's shares.

Article 33: If the Transferor opts to effect the transfer of the listed company's share by way of a large block transaction, the share transfer price may not be lower than the weighted average price of the listed company's shares traded that day. If there are no transactions that day, the transfer price may not be lower than the weighted average price on the preceding trading day.

Article 34: After completion of the transfer of the listed company's shares, the Transferor shall carry out procedures for registration of state-owned assets and equity in accordance with relevant state provisions in a timely manner.

PART FOUR: TRANSFER OF STATE-OWNED ASSETS DIRECTLY BY WAY OF AN AGREEMENT

Article 35: Subject to the approval of the State Council or the Ministry of Finance, a Transferor may transfer state-owned assets and equity of an unlisted enterprise or state-owned shares of a listed company directly by way of an agreement if:

(1) relevant state provisions have special requirements in respect of the Transferee;

(2) a holding (group) company is carrying out an internal asset reorganisation; or

(3) there is another special reason.

If an asset reorganisation within a holding (group) company is to be carried out by a direct transfer by agreement, the Ministry of Finance shall be responsible for the work associated with the transfer of assets and equity of a top-level subsidiary of a financial enterprise subject to administration by the central government. The holding (group) company shall be responsible for the transfer of assets and equity of subsidiaries other than top-level subsidiaries. If shares of a listed company in which it has a controlling interest are to be transferred directly by way of an agreement, the holding (group) company shall submit the transfer plan to the Ministry of Finance for examination and approval.

Article 36: If a Transferor opts to transfer assets and equity of an unlisted enterprise directly by way of an agreement, it shall arrange for formulation of the transfer plan, an asset appraisal, submission of the materials to be examined, execution of the transfer agreement, collection of the transfer price, etc. in accordance with Articles 13, 14, 15, 23 and 24 hereof.

Article 37: The price for a transfer of assets and equity of an unlisted enterprise directly by way of an agreement may not be lower than the approved or recorded asset appraisal result.

If, in the course of effecting an internal asset reorganisation, a state-owned financial enterprise intends to transfer assets and equity directly by way of an agreement, and both the Transferor and Transferee are wholly-owned subsidiaries of the holding (group) company, an overall appraisal of the enterprise that is the subject of the transfer may be omitted provided that the transfer price is not lower than the audited and confirmed net asset value of the most recent period.

Article 38: The examination by the Finance Department of a transfer of assets and equity of an unlisted enterprise effected by a financial enterprise directly by way of an agreement shall be handled in accordance with Article 25 hereof.

Article 39: If a Transferor intends to transfer shares of a listed company directly by way of an agreement, it shall, in accordance with its internal decision-making procedure, submit the same to the shareholders' general meeting, board of directors or other decision-making body for deliberation and conclusion of a written resolution, and report the same to the Finance Department in a timely manner.

The Transferor shall communicate to the listed company the information on its proposed transfer of shares directly by way of an agreement and the listed company shall issue an alert to the public in accordance with the law. The alert shall note that the matters relating to the proposed transfer of shares directly by way of an agreement require the examination and approval of the Finance Department.

Article 40: When a Transferor is to transfer shares of a listed company directly by way of an agreement, it shall submit the following materials to the Finance Department:

(1) an application letter for the transfer of shares of the listed company by way of an agreement, which includes the reason for the transfer, the number of shares to be transferred, the holding cost, etc.;

(2) the internal decision document for the transfer of shares of the listed company by way of an agreement and a feasibility study report;

(3) the information on the transfer of the shares by way of an agreement that is to be publicly disclosed; and

(4) other documents as specified by the Finance Department.

Article 41: Once the Finance Department has received the materials concerning the transfer of shares of the listed company directly by way of an agreement submitted by the Transferor, it shall carefully examine the same and determine whether to approve the matters relating to the transfer by way of an agreement, and give its response within 15 working days.

Within two days after receipt of the opinions issued by the Finance Department, the Transferor shall inform the listed company thereof in writing and the listed company shall publicly disclose in accordance with the law information on the intent of the holder of the state-owned shares to transfer shares of the listed company directly by way of an agreement.

Article 42: Information on the transfer of shares of the listed company by the Transferor directly by way of an agreement shall include the following:

(1) the number of shares to be transferred, the name of the listed company involved and its basic particulars;

(2) the qualification conditions that the Transferee is required to satisfy;

(3) the deadline for the submission of the acquisition application by the Transferee; and

(4) the approval opinions of the Finance Department and relevant departments.

Article 43: Subject to approval by the Finance Department, the Transferor may be exempted from disclosing information on the transfer of shares of the listed company by way of an agreement if:

(1) the industry or sector is a key industry or sector of the national economy and such industry or sector has special requirements in respect of a Transferee;

(2) the Transferor, as a state-owned controlling shareholder, is carrying out the transfer by agreement within the holding company or group enterprise in order to integrate state-owned assets or carry out an asset reorganisation;

(3) the listed company has made losses for two years in succession, there is a risk of its withdrawal from the market or it is facing a severe financial crisis and the Transferee has put forward a major asset reorganisation plan and a specific timetable; or

(4) the listed company is conducting a share buyback that involves shares held by the Transferor.

Article 44: If the Transferor, as a controlling shareholder of the listed company, intends to transfer shares directly by way of an agreement and by doing so it would lose control, it shall engage appropriately qualified intermediary firms to serve as financial consultant and legal consultant and submit written opinions. The financial consultant and legal consultant shall have a good reputation and no record of a major violation of laws or regulations during the last three years. If it deems it necessary, the Transferor may engage an asset appraisal firm qualified to appraise securities to carry out an appraisal of the assets that are the subject matter of the transfer.

Article 45: When a Transferor is to transfer shares of a listed company directly by way of an agreement, the transfer price shall be based on the principle of whichever is higher of the weighted average price of the daily weighted average prices on the 30 trading days before the date of the announcement of the information on the transfer of the shares of the listed company (if, subject to approval, information on the share transfer need not be disclosed, the date on which the share transfer agreement was executed) and the weighted average price on the preceding trading day.

If the Transferor, as a state-owned controlling shareholder of a listed company, is effecting an internal transfer by agreement in order to integrate state-owned assets or carry out an asset reorganisation and its equity interest in the listed company will not diminish as a result thereof, the transfer price shall be determined reasonably through negotiations based on factors such as the listed company's audited net assets, return on equity and price earning ratio for the most recent period.

Article 46: If, after acquisition of the listed company's shares, the Transferee would obtain actual control of the listed company, it shall satisfy the following conditions:

(1) having legal personality;

(2) having been established for at least three years, and having been profitable for, and not having a record of a major violation of laws or regulations during, the two most recent years in succession; and

(3) having the capacity to promote the continued development of the listed company and improve its corporate governance structure.

Article 47: Once the Transferee has been determined, the Transferor shall execute a share transfer agreement with it in a timely manner.

The transfer agreement shall include but not be limited to provisions specifying the following:

(1) the corporate names, names of the legal representatives and domiciles of the Transferor, the listed company and the Transferee;

(2) the number of shares held by the Transferor, the number of shares it intends to transfer and the price;

(3) the rights and obligations of the Transferor and Transferee;

(4) the method of, and deadline for, payment of the share transfer price;

(5) conditions for the registration and transfer of ownership of the shares;

(6) conditions for the amendment and termination of the agreement;

(7) method of resolving disputes relating to the agreement;

(8) liability for breach of contract by the parties to the agreement; and

(9) the conditions for the entry into effect of the agreement.

Article 48: If the Transferor of shares of a listed company is a state-owned or state-controlled financial enterprise, it shall submit the following materials to the Ministry of Finance in a timely manner after determination of the Transferee:

(1) relevant details on the implementation of the transfer plan and the selection of the Transferee;

(2) its financial accounting reports for the preceding financial year as audited by an accounting firm;

(3) the basic particulars and articles of association of the Transferee and its financial accounting reports for the most recent period as audited by an accounting firm;

(4) the basic particulars of the listed company, its interim financial accounting reports for the most recent period, and its annual financial accounting reports for the most recent period as audited by an accounting firm;

(5) the share transfer agreement and an explanation on the setting of share transfer price;

(6) details of major events such as equity transfers, asset exchanges and investments among the Transferee, the holder of state-owned shares and listed company during the most recent 12 months and details of their claims and debts;

(7) a legal opinion issued by a law firm;

(8) the effect that the transfer of the shares of the listed company will have on the company's share price and on the capital market; and

(9) other documents as specified by the Finance Department.

Article 49: The Finance Department shall carefully examine the materials submitted by the Transferor and issue an official reply on the share transfer.

Article 50: The Transferor shall collect the transfer price in accordance with Article 24 hereof and, in accordance with relevant state provisions, carry out relevant procedures for registration of state-owned assets and equity in a timely manner.

PART FIVE: LEGAL LIABILITY

Article 51: If any of the following circumstances arises in the course of the transfer of state-owned assets of a financial enterprise, the Finance Department may demand that the Transferor immediately suspend or terminate the asset transfer activities:

(1) the transaction was not carried out through an assets and equity exchange in accordance with the relevant provisions hereof;

(2) the Transferor transferred assets without carrying out the appropriate internal decision-making procedure or approval procedure, or did so ultra vires or without obtaining the approval of the Finance Department and relevant departments in accordance with provisions;

(3) the Transferor or the enterprise that is the subject of the transfer deliberately concealed assets that ought to have been included among those subject to appraisal, or submitted fraudulent accounting information to the intermediary firm, resulting in an inaccurate auditing or appraisal result, or the wastage of state-owned assets due to the fact that they were not audited or appraised;

(4) the Transferor and Transferee colluded to transfer state-owned assets at a low price, resulting in the wastage of state-owned assets;

(5) the Transferor failed, in accordance with provisions, to ascertain the claims and debts of the enterprise that is the subject of the transfer, or illegally transferred claims or evaded its liability for the discharge of debts; if state-owned assets of a financial enterprise were used to provide security, the Transferor failed to obtain the consent of the secured creditor when transferring said assets;

(6) the Transferee used means such as fraud, and concealment to affect the selection by the Transferor or the execution of the asset transfer agreement; or

(7) Transferees maliciously colluded in the course of the competitive bidding for the transfer of assets and equity so as to depress the price, resulting in the wastage of state-owned assets.

Article 52: If any of the circumstances set forth in Article 51 hereof applies to a Transferor or to an enterprise that is the subject matter of a transfer, the Finance Department shall give a warning and recommend to the relevant department that it impose administrative sanctions on the person with direct responsibility and other directly responsible persons; if wastage of state-owned assets was caused as a result thereof, it shall recommend that the relevant department pursue the liability of the directors, supervisors and senior management personnel of the financial enterprise in accordance with the law. If state-owned assets were wasted due to liability on the part of the Transferee, it shall, in accordance with the law, compensate for the economic losses incurred by the Transferor. If a criminal offence is suspected, the case shall be transferred to the judicial authorities.

Article 53: If an accounting firm, asset appraisal firm, law firm, financial consulting firm or other such intermediary firm commits a violation of regulations in its practice while providing auditing, appraisal, legal or consulting services in the course of a transfer of state-owned assets, the Finance Department shall report the relevant circumstances to the department in charge of the industry and recommend that it appropriately deal with the matter in accordance with the law.

Article 54: If an assets and equity exchange practises fraud or is derelict in its duties in the course of a transaction involving state-owned assets of a financial enterprise, thereby harming the interests of the state or the lawful rights and interests of the parties to the transaction, the Finance Department may suspend its engagement in business relating to the trading of state-owned assets of financial enterprises and recommend to the relevant department that it pursue the liability of the assets and equity exchange and the persons directly responsible in accordance with the law.

Article 55: If an authority, or relevant personnel thereof, responsible for the approval of transfers of state-owned assets of financial enterprises violates a law, administrative regulations or these Measures, resulting in the wastage of state-owned assets, the relevant department shall impose disciplinary sanctions in accordance with the law; if a criminal offence is suspected, the case shall be transferred to the judicial authorities.

PART SIX: SUPPLEMENTARY PROVISIONS

Article 56: The finance department (bureau) of a province, autonomous region, municipality directly under the central government or city with independent development plans may formulate implementing measures for the administration of the transfer of state-owned assets of financial enterprises in its jurisdiction based on these Measures, and shall submit the same to the Ministry of Finance for the record.

Article 57: If a state-owned or state-controlled financial enterprise receives compensation in the form of a transfer of assets and equity of an unlisted enterprise held by a debtor, guarantor or third party as a result of exercising a claim or security rights in accordance with the law, such transfer shall be effected through an assets and equity exchange with reference to Part Two hereof.

If a state-owned or state-controlled financial enterprise receives compensation in the form of a transfer of shares of a listed company held by a debtor, guarantor or third party as a result of exercising a claim or security rights in accordance with the law, such transfer shall be effected through a securities trading system with reference to Part Three hereof.

Article 58: If state-owned assets held by a state-owned or state-controlled financial enterprise are involved in a legal action, the relevant transfer procedures shall be carried out based on the document with legal effect issued by the people's court.

Article 59: The sale by a financial enterprise, such as state-owned or state-controlled securities company, fund management company, asset management company, trust company or insurance asset management company, of shares of a listed company that it holds on its own account shall be handled in accordance with relevant provisions.

Article 60: If relevant state policy provides otherwise in respect of the transfer by financial asset management companies of bad assets or debt for equity assets, such provisions shall apply.

For the purposes of these Measures, the term “financial asset management company” means China Huarong Asset Management Corporation, China Great Wall Asset Management Corporation, China Orient Asset Management Corporation and China Cinda Asset Management Corporation.

Article 61: The regulation of the transfer of state-owned assets of enterprises subordinate to the head office of the People's Bank of China, of China Investment Corporation (including Central Huijin Investment Company Limited), credit security companies and other financial-type enterprises shall, mutatis mutandis, be handled in accordance with these Measures.

Article 62: These Measures shall be effective as of May 1 2009.