Chinese Mandarin - No MBOs allowed at large SOEs of China

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No MBOs allowed at large SOEs of China

www.chinanews.cn 2005-01-14 17:17:40

Chinanews.com, Jan. 14 - According to Li Rongrong, head of the
State-owned Assets Supervision and Administration Commission (SASAC), the
central government had recently decided that no management buyouts (MBO)
would be allowed at major State-owned enterprises (SOE). MBOs at small
and medium-sized enterprises should be evaluated on case by case basis.
Generally such buyouts would only be allowed to go forward under strict
supervision by the local state assets management agencies or other
relevant departments and in accordance to a well-defined equity rights
scheme.
According to Li, important progress had been made last year in
standardizing transactions of state-owned assets. Total transactions
increased rapidly to 3.599, 85% of them, or 3,055 transactions, were
conducted in the open market. All the transactions in Shanghai's cases,
96% transactions in Guangdong's, 90% transactions in Beijing's, 87.4%
transactions in Sichuan's and 87% transactions in Jiangxi's were
conducted in the open market. The price-over-appraisal value ratios in
these transactions have increased by a big margin.
Li also pointed out that there were still some serious problems in SOE
reform and privatization transactions. These problems include MBOs and
illegal transfers of state-owned assets, and they should not be
neglected. He hoped that all local state assets management agencies could
keenly look for those problems and carefully correct malpractices.

E-mail: zhangqinghua@chinanews.com.cn Tel: 8610-88387443 Fax:
8610-68327649

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