As approved by the State Council, China Securities Regulatory
Commission (CSRC) issued the "Notice on Related Problems about
Experimental Reform of Equity Division" on Friday, announcing to
kick off the experimental reform of the equity division and the
notice to be put into practice as from the very day onwards.
According to a responsible person concerned the equity division
refers to part of the shares of the listed company that will be put
into circulation in the stock market with the rest to be
temporarily kept off from the market. This is incurred by many
historical factors.
In accordance with the regulations, to keep the stock market
stable and protect the lawful rights of investors, especially the
public investors CSRC will, in line with the intention for reform
of the shareholders of listed companies and the recommendation of
recommending organs, determine on the basis of consultation the
companies for the experimentation of reform. The solution plan for
equity division is going to be decided by shareholders of the
listed company themselves.
According to the regulations, the listed company for
experimentation should perform the duty of information release on
time and do it in a truthful, accurate and complete way and do well
the application work for the suspension and re-issuance of the
shares. Whichever company is determined to be the company for
experimentation should make the release of information the first
thing of the day and apply for the suspension of the trading.
The listed company for experimentation should, calling an
interim meeting of shareholders, work up a relevant arrangement for
the shareholders of the circulative shares to exercise their powers
when taking part in the meeting of the shareholders. The board of
directors of the listed company as recommended for experimentation
should invite the recommending organs to help mete out the equity
division plan.
The shareholders holding the non-circulative shares of the
listed company for experimentation should make promises step by
step for listing and perform the duty of releasing related
information if they are going to sell their shares approved for the
listing through the security exchange.
(People's Daily May 1, 2005)