China Securities Regulatory Commission, Circular on Matters Relevant to Further Implementing Cash Dividends by Listed Companies
中国证券监督管理委员会关于进一步落实上市公司现金分红有关事项的通知
May 31, 2012 | BY
clpstaff &clp articles &Explanation required from listed companies with low level of cash dividends.
Issued: May 4 2012
Main contents: A listed company proposing to offer securities shall formulate a reasonable plan for shareholder returns, reasonably balance the use of operating profits for its own development and for shareholder returns and attach great importance to enhancing the level of cash dividends and the rewarding of shareholders.
A listed company shall provide in its prospectus or offer proposal additional disclosure of details of the formulation and implementation of its profit distribution policy, in particular its cash dividend policy, the amounts and percentages of its cash dividends for the most recent three years and details of the arrangements for the use of undistributed profits, and give a “material matter warning” drawing the attention of investors to the aforementioned matters. In its sponsorship work report, the sponsor shall express a clear opinion as to whether the listed company's decision-making mechanism for its profit distribution policy is compliant, whether it has established a sustainable, stable and objective mechanism for investor returns, whether it has performed its cash dividend undertakings and whether it has implemented the requirements of this Circular.
With respect to a listed company whose level of cash dividends has been relatively low for the most recent three years, the issuer and sponsor shall give the reasons therefor by taking into account the features and business models of different industries and different types of companies, the development stage at which the company finds itself, and its profitability level, funding requirements and other such factors, and express a clear opinion as to whether the company has fully considered the demands and wishes of the shareholders, whether it has given investors reasonable returns and whether the company's cash dividend policy complies with the principle of maximising the interests of a listed company's shareholders (Article 7).
When a party effects a backdoor listing, material asset re-organisation, merger or division, or if an acquisition results in a change in the control of a listed company, it shall, in accordance with the requirements of this Circular, disclose in detail in the material asset re-organisation report, change in equity report or acquisition report the listed company's cash dividend policy, related plans and arrangements, and details of the board of directors after the re-organisation or change in control (Article 8).
clp reference:3700/12.05.04promulgated:2012-05-04This premium content is reserved for
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