Perspectives on Acquisitions of Non-listed Shares

September 02, 2003 | BY

clpstaff &clp articles

By Jonathan Pan, Llinks Law Office, ShanghaiState-owned shares and legal persons shares in PRC listed companies (collectively, "non-listed shares") have…

By Jonathan Pan, Llinks Law Office, Shanghai

State-owned shares and legal persons shares in PRC listed companies (collectively, "non-listed shares") have attracted the interest of both domestic companies and foreign investors.

In looking at the background of this topic, a good place to start is a review of the former State Council Securities Commission's Suspension of Handling Applications for Transfer of State-owned Shares and Legal Persons Shares in Listed Companies to Foreign Investors Circular (the 1995 Circular). According to the 1995 Circular, foreign investors are prohibited from purchasing non-listed shares in listed companies. Although the 1995 Circular fails to provide a definition of "foreign investors", in practice it is widely recognized that the term means foreign individuals and corporates, as well as foreign-invested enterprises (FIEs).

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