China's top state assets watchdog said Thursday that the government will strictly regulate transfer of state property and will correct past irregularities.
Li Rongrong, minister in charge of the State-owned Assets Supervision and Administration Commission (SASAC), said at a meeting Thursday that management buyout will not be allowed in big state-owned companies, but is permitted and strictly regulated in small and medium-sized state companies.
The plans of ownership transfer should be drafted by independent intermediaries rather than the management themselves, Li said. The management of some state companies sold out their companies at prices decided by themselves,
In taking shares of state companies, potential buyers are not allowed to borrow funds from the companies which sell stocks or their holding subsidiaries, Li said.
Li asked all the state property transfer to be transacted in authorized exchanges, which might help curb unreasonable loss of state assets after the transaction.
Restructuring of state companies is urgently needed, because China's state-owned businesses face global competition after China entered into the World Trade Organization, Li said.
From June to November last year, the SASAC, together with other cabinet-level organs, organized ten teams to supervise state property transfer and other issues in 21 provinces, municipalities and autonomous regions.
(Xinhua News Agency January 14, 2005)
