State-owned Assets Supervision and Administration Commission of the State Council and Ministry of Finance, Administration of the Assignment of Enterprise State-owned Assets and Equity Tentative Procedures

Promulgated: December 31 2003
Effective: February 1 2004
Interpreting authority: State-owned Assets Supervision and Administration Commission of the State Council and where other departments are involved, State-owned Assets Supervision and Administration Commission of the State Council in consultation with other departments
Applicability: The Procedures apply to activities whereby state-owned assets supervision and administration authorities and enterprises holding state-owned capital assign, with consideration, the enterprise state-owned assets and equity held by them to legal persons, natural persons and other organizations inside or outside China (Article 2).
   "Enterprise state-owned assets and equity" means the interests formed by all types of injections from the state to enterprises, interests that should be enjoyed by state-owned or state-controlled enterprises resulting from various investments, as well as other interests legally recognized as state-owned (Article 2).
  The assignment of state-owned assets and equity of financial-type enterprises and state-owned equity of listed companies shall be carried out in accordance with relevant state provisions (Article 2).
  Where the state has other provisions regarding administration of the assignment of state-owned assets and equity of non-listed companies limited by shares, such provisions shall prevail (Article 27).
  Administrative procedures for assignment of state-owned assets and equity of overseas enterprises shall be formulated separately (Article 36).
  Assignment of enterprise state-owned assets and equity held by work units not yet separated from enterprises or held by other work units, shall be approved by the department in charge of finance and specific details shall, mutatis mutandis, be handled in accordance with the Procedures (Article 37).

Main contents: The Procedures stipulate that assignment of state-owned assets and equity should be held publicly in legally established assets and equity exchanges with no geographical, industrial, capital contribution or subordination restrictions (Article 4). Article 13 stipulates that where the state-owned assets and equity transaction price is lower than 90% of the results of an asset valuation, approval must be obtained before the transaction can proceed. The Procedures also detail the information required to be disclosed by the assignor, qualifications required of the assignee, main contents of the assignment contract as well as the approval procedure.
Related legislation: Supervision and Administration of Enterprise State-owned Assets Tentative Regulations, May 27 2003, CLP 2003 No.6 p36; PRC Security Law, Jun 30 1995, CLP 1995 No.6 p21 and PRC Auction Law, Jul 5 1996, CLP 1996 No.7 p10