State-Owned Assets Supervision and Administration Commission of the State Council, Operational Rules for Transactions Involving State-Owned Assets of Enterprises

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Issued: February 18, 2025
Effective: as of date of issuance


Main contents:   For a capital increase of a state-owned enterprise, prospective investors shall, by the official disclosure announcement deadline, submit an investment application and the relevant materials to the property rights trading institution, which shall register each of such prospective investors (Article 55).

The selection methods available to enterprises making a capital increase include bidding, competitive negotiation, comprehensive evaluation, etc. The enterprise making the capital increase may use the aforementioned selection methods individually, in combination or in multiple rounds (Article 62).

When selecting a strategic investor, the focus shall mainly be on concordance and synergy with the enterprise’s development strategy, business objectives, main business, etc. When selecting a financial investor, the focus shall mainly be on its financial strength and financial position (Article 63).

The parties to a transaction may not specify, in the capital increase agreement or otherwise, provisions on equity buyback, nominal holding of equity, nominal equity but actual debt, etc. nor may they revise the agreed upon transaction conditions and transaction price on such grounds as operational gains or losses of the enterprise during the transaction period. Unless otherwise provided, where a state invested enterprise and its subsidiaries participate in capital increase activities, they may not provide such funding support as loans, security, etc. to other shareholders (Article 69).

Repealed legislation: Operational Rules for Transactions Involving State-Owned Equity of Enterprises, June 15, 2009