Non-Listed Public Company Takeover Regulation

Original Language Title: 非上市公众公司收购管理办法

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Read the untranslated law here: http://www.chinalaw.gov.cn/article/fgkd/xfg/gwybmgz/201503/20150300398600.shtml

Non-listed public company takeover regulation

    (June 23, 2014, China Securities Regulatory Commission announced the 102th since July 23, 2014) Chapter I General provisions First article to specification non-listed public company (following referred to public company) of acquisition and the related shares interests changes activities, protection public company and investors of lawful rights and interests of, maintenance securities market order and social public interests, promote securities market resources of optimization configuration, according to securities method, and company law, and State on national SMEs shares transfer system about problem of decided, and State on further optimization Enterprise merger restructuring market environment of views and the other related legal, and administrative regulations,

    These measures are formulated.

    II stock in national SME share transfer system (hereinafter referred to as the national stock transfer system) open transfer of public companies, and related changes in interests in shares and acquisition activities shall comply with these regulations. Third public acquisitions and activities related to changes in interests in shares of the company, must comply with the laws, administrative regulations, and the China Securities Regulatory Commission (hereinafter referred to as the China Securities Regulatory Commission), and follow the principle of openness, fairness and justice.

    The Parties shall be honest and trustworthy, abide by social morality, business ethics, and consciously safeguard the order of the securities market, and accept supervision by the Government and the public.

    Fourth public company acquisitions and activities related to changes in interests in shares related to national industrial policies, access to industry, State-owned shares, such matters as foreign investment to acquire the approval of the relevant departments of the State shall, after obtaining the approval.

Fifth purchase of shares made ways for people to become the controlling shareholder of a public company, through investor relations, agreements, other arrangements of who actually controlled the way to become a public company, you can also take the ways and means of public control.

    Purchasers include investors and persons acting in concert. Sixth public company acquisition, the acquirer and the actual controller should have a good credit record, the acquirer and the actual controlling legal entity shall have a sound corporate governance system.

No one may make use of the public company acquired prejudice and the legitimate rights and interests of the shareholders of the acquired company.

Any of the following circumstances, it may not be purchased by the public company:

(A) the purchaser has a large amount of debt, overdue, and status;

(B) the acquirer will last 2 years have a significant violation of law or persons suspected of serious violations;

(C) purchaser serious stock market in the last 2 years of credit;

(D) the acquisition of a natural person, the company law provisions of the 146th section;

    (E) the laws, administrative regulations, and recognized by the China Securities Regulatory Commission may not be purchased by other public companies.

Seventh of the acquired company's controlling shareholder or the actual controller may not abuse its right of shareholders of the acquired company or the legitimate rights and interests of other shareholders. Was acquisition company of holding shareholders, and actual control people and associated party has damage was acquisition company and the other shareholders lawful rights and interests of of, above holding shareholders, and actual control people in transfer was acquisition company control right zhiqian, should active elimination damage; failed to elimination damage of, should on its transfer related shares proceeds income for elimination all damage made arrangements, on insufficient to elimination damage of part should provides full effective of performance guarantees or arrangements, and submitted was acquisition company shareholders Assembly considered through, was acquisition company of holding shareholders, and

    Actual control and its related parties should withdraw from voting.

Article eighth of the acquired company's directors, supervisors and senior management personnel of the company have a duty of loyalty and diligence obligation, should be fair to all purchasers to buy the company.

    Decisions made by the Board of Directors for the acquisition of the acquired company and the measures taken, should be conducive to safeguarding the interests of the company and its shareholders shall not abuse of inappropriate obstacle acquisition, must not use company resources to provide the purchaser with any form of financial assistance.

Nineth article acquisition people according to this approach third chapter, and fourth chapter of provides for public company acquisition of, should hired has financial consultant business qualification of professional institutions served as financial consultant, but through State-owned unit administrative designated turned or change, and for inherited made shares, and shares in same actual control people control of different subject Zhijian for transfer, and made public company to its issued of shares, and judicial judgment led to acquisition people became or intends became public company first big shareholders or actual control people of case except. Acquisition people hired of financial consultant should diligent due diligence, comply with industry specification and ethics, keep independence, on acquisition people for counselling, help acquisition people full assessment was acquisition company of financial and business status; on acquisition people of related situation for due diligence survey, on acquisition people disclosure of file for full verification and validation; on acquisition matters objective, and just to published professional views, and guarantee its by making, and issued file of authenticity, and accuracy and integrity.

Notice in the buyer acquired company acquisitions to report within 12 months after the acquisition, financial advisers should be continuous supervision acquirer will comply with the laws, administrative regulations, provisions of the China Securities Regulatory Commission, the national relevant rules of the share transfer system as well as the articles of incorporation, shall exercise the shareholder's rights, practical implementation of commitment or agreement.

    Financial advisers say the purchaser acquired the company and its shareholders by acquiring harm the legitimate rights and interests, should be refused for the purchaser to provide financial consultancy services.

Tenth public company acquisitions and activities related to changes in interests in shares of the disclosure obligation, it shall strictly comply with disclosure and other legal obligations, the information disclosed and to ensure the timely, true, accurate and complete, no false record, misleading statement or material omission. Information disclosure obligation shall share transfer system in the country specified disclosure platform (hereinafter referred to as the specified Web site) shall disclose information; disclosures in other media, disclosure should be consistent disclosure time shall not be earlier than the specified Web site time.

In front of the related disclosure, disclosure obligations and related information confidential, prohibit the use of this information for insider trading and market manipulation.

    Information disclosure law before the disclosure of, relevant information has been spread in the media, or stock transfer appears abnormal, query public company shall promptly inform the parties, the Parties shall be a written reply, public companies should be disclosed in a timely manner.

11th the CSRC public company acquisitions and regulatory activities related to changes in interests in shares.

National stock transfer system business rules should be established, for the acquisition of a public company providing services and activities related to changes in interests in shares, real time monitoring of activities related to securities transfer to oversee public company acquisitions and activities related to changes in interests in shares of the disclosure obligations of the effective fulfilment of disclosure obligations.

    China Securities Depository and Clearing Corporation business rules should be developed for public company takeovers and involved in activities related to changes in interests in shares of the securities registration, custody and settlement services.

    Chapter disclosure of interests 12th the investor has an interest in the public company, including shares registered in his name and was not registered in his name but the investor can actually dominate the voting shares.

    Investors and its concerted actions people have an interest in the public company should be combined.

13th under any of the following circumstances, investors and their concerted action shall, from the date of the facts in the 2nd report on the preparation and disclosure of changes in equity, submitted to the national stock transfer system, notify the public company since the date of that fact until after the disclosure in the 2nd, may not sell the public shares in the company.

(A) through the national market of share transfer system, bidding in stock transfer, investors and their concerted action has an interest 10% of shares of shares of public companies;

(B) by agreement, investors and its concerted actions in the public has an interest in shares of the company seeks to achieve or exceed 10% of the shares of the public company. Investors and its concerted action has equity stakes to 10% after shares of the public company, which has an interest of the shares of the public company's shares each increase or decrease 5% (that is, their interest in shares each when they reach 5% an integer multiple of), should be disclosed in accordance with the provisions of the preceding paragraph.

    From that date until after the disclosure of the facts in the 2nd, may not sell the public shares in the company.

14th investors and its concerted action by administrative transfers or changes, enforcement of court decisions, inheritance, gift, cause it has a direct ownership interest of the percentage changes in the shareholding of up to the preceding article, shall perform disclosure obligations in accordance with the provisions of the preceding article.

    Investors are not shareholders of a public company, but by investing in relationships, agreements, other arrangements, such as acquisitions led to change its stake indirect ownership interests to achieve prescribed in the preceding article, shall perform disclosure obligations in accordance with the provisions of the preceding article. 15th to other investors for public companies to issue shares, reduce equity investors and its concerted actions who owns rights to changes in the provisions of this chapter, investors and their concerted action from fulfilment of disclosure obligations.

    Public companies should be completed to increase the share capital, reduce equity from the date of registration of change within the 2nd, as a result of shareholders own shares in equity changes in disclosure.

    Chapter III control of changes in disclosure 16th article through national shares transfer system of securities transfer, investors and consistent action people has interests of shares changes led to its became public company first big shareholders or actual control people, or through investment relationship, and agreement transfer, and administrative designated turned or change, and implementation Court ruled, and inherited, and gift, and other arrangements, way has interests of shares changes led to its became or intends became public company first big shareholders or actual control people and has interests of shares over public company has issued shares 10% of,

Should the facts occurred within 2nd day of preparation of the report on the acquisition, professional advice along with financial advisers and lawyers provide legal opinion letters be disclosed, submitted to the national stock transfer system, notify the public company.
Acquire stakes in public companies need to obtain approval of the relevant departments of the State, the acquirer should be clearly stated in the report on the acquisition and continued disclosure of progress made in the ratification process.

    Article 17th acquisitions of public companies by agreement, since the signing of the deal until the completed transfer of shares for the acquisition of a public company during the transition period (hereinafter referred to as the transition period).

During the transition period, the acquirer may be by having a new controlling shareholder proposals public company Board of Directors, there is every reason to change the Board from the acquirer shall not exceed the total number of members of the Board of Directors of 1/3; the acquired company shall guarantee the purchaser and its affiliates; the acquired company shall not issue shares to raise funds.

    During the transition period, acquired the company in addition to continue normal operations or general meeting of shareholders has made towards implementing resolutions, acquired company's Board of Directors intends to dispose of assets of the company, adjusting the company's main business, guarantees, loans and other bills, may be on the company's assets, liabilities, rights or significant impact on operating results, shall be submitted to the general meeting of shareholders for adoption.

Article 18th after the acquisition of a public company under this approach, the acquirer becomes the largest shareholder of the company or control person, acquired shares of the company held by the purchaser, shall not be transferable within 12 months after the acquisition is completed.

    The purchaser has an interest in the acquired company's shares at the same actual control control of transfer between different subjects without the limitation of the preceding 12 months.

19th in public company takeovers, acquisitions made public commitments, should be accompanied by commitments by failing to fulfil when restraint measures and public disclosure.

    National stock transfer system should be open to the purchaser to fulfil commitments to monitor and discipline, the purchaser fails to fulfil commitments to take self-regulatory measures.

20th public company controlling shareholders and actual controllers to the acquirer will transfer its shares of the public company, the purchaser shall be subject qualifications, integrity and purchase intent for investigation and disclosure of the investigation in its report on changes in equity.

    Acquired company's controlling shareholder, actual control and its related parties did not pay off its debt to the company, outstanding company for the guarantee of their liabilities, or other circumstances as damaging the interests of the company, acquired company Board of directors should be told the case disclosed in a timely manner, and take effective measures to safeguard the interests of the company.

    Fourth chapter of tender offer

    Article 21st investors choose to buy shares in a public offer, issued to all shareholders of the acquired company can offer to purchase all of the shares held by (hereinafter referred to as comprehensive an offer), can also be issued to all shareholders of the acquired company to buy its stake in the offer (hereinafter referred to as part of the offer).

    Article 22nd volunteered to buy shares in a public offer, its intended purchase of shares shall not be lower than the shares of the public company 5%.

Article 23rd should be specified in the articles of incorporation of a public company was acquired in the company whether the acquirer needs issued a general offer to all shareholders of the company acquisition, and clear comprehensive trigger conditions for the tender offer and the corresponding institutional arrangements.

    Purchasers according to the Statute of the acquired company need to be issued a full takeover offer to all shareholders of the company, to offer the same kinds of stocks price shall not be lower than the tender offer report disclosure date within 6 months of the acquisition of the shares paid the highest price.

    Article 24th conducted a public takeover offer, the acquirer should be fair to all shareholders of the acquired company.

25th to buy shares in a public offer, the acquirer should engage a financial adviser, and the tender offer report, professional advice along with financial advisers and lawyers provide legal opinion letters be disclosed, submitted to the national stock transfer system, notify the public company.

    Takeover approved by the relevant departments of the State is needed, the acquirer should be clearly stated in the tender offer report and disclose progress made in the ratification process. 26th can be applied to purchase of cash, securities, cash and securities combining lawfully pay the price for the acquisition of a public company. Financial advisers employed by the purchaser shall explain the acquirer will have the capacity to offer.

Report of the offer shall be disclosed in the offer to purchase at the same time, provide arrangements to ensure their ability to perform at least one of the following items:

(A) will many Yu acquisition price total of 20% as performance margin deposit China securities registration settlement limited responsibility company specified of Bank, financial institutions; acquisition people to in China securities registration settlement limited responsibility company registration of securities paid acquisition price of, in disclosure offer acquisition report book of while, will for paid of all securities to China securities registration settlement limited responsibility company application handle ownership change or lock;

(B) banks and other financial institutions need to offer guarantees issued by price; (C) joint and several liability issued by financial advisers in writing.

Offer expires, the purchaser does not pay the purchase price, financial consultants shall bear joint and several liability and payment. Purchaser to pay the purchase price of securities, should be disclosed to the securities of the issuer in recent 2 years audited financial statements, securities valuation reports, and with the acquired company or appoint an independent financial adviser due diligence work.

    Purchaser is not registered with the China Securities Depository and Clearing Corporation securities and payment of the purchase price, have to provide cash for the acquired company's shareholders to choose, and detailed disclosure-related securities custody, delivery methods and procedural arrangements being shareholders of the acquired company.

27th acquired company Board of directors should be on purchaser's qualifications, credit and purchasing intentions survey, the acceptance conditions are analyzed, making recommendations on whether shareholders accept the offer, and can themselves choose whether or not to appoint an independent financial consultant providing professional advice. The acquired company decides to appoint an independent financial adviser, they can arrange the hosting broker to provide mentoring services for independent financial advisers, but affect independence, financial consulting limited, who are not except as an independent financial adviser.

    The acquired company can also hire other organizations to provide advisory services.

28th acquisition period stipulated in the offer shall not be less than 30th, and shall not be more than 60 days; but the competition except the offer. Purchase tender offer report period commencing the date of disclosure.

Takeover approval from relevant departments of the State needs, the acquirer should be made this acquisition, together with the issue of ratification of the special verification observations in all the approval disclosure within the 2nd, the acquisition period commencing the date of disclosure.

    In a tender offer within the prescribed time limit, the purchaser may withdraw its tender offer.

    Article 29th purchase way, purchaser disclosure until tender before expiry, shall not sell the shares of the acquired company, and shall not, except as provided in an offer form and the conditions exceeds the offer to buy shares of the acquired company. 30th acquisition people need to change the offer should be renewed takeover offer for preparation and disclosure of the report, submitted to the national stock transfer system, notify the acquired company.

Changed after the tender offer price of tender offer price shall not be lower than before the change.

Takeover in the 15th before the expiry, the acquirer shall not change a takeover offer; but the competition except the offer.

When there is a competing offer, the initial offer the purchaser changes tender offer less than the 15th from initial tender offer period shall extend takeover period, extended the offer period shall be not less than 15th, shall not exceed the expiration date of the last competition offered and provides additional performance bond.

    Make a competitive offer of purchaser no later than at the latest before the expiry of the initial tender offer period 15th by revealing takeover report, and should be in accordance with the measures set out in the disclosure obligation.

    31st during the takeover, the acquired company directors shall not resign.

Article 32nd shareholders agreed to accept a takeover offer (hereinafter referred to as shareholder) shall entrust securities companies ' acceptance of the relevant procedures. In 2nd period before expiration of a takeover, shareholders may not withdraw its acceptance of the offer.

During the offer period, the acquirer shall be disclosed a takeover offer daily number of shares.

    2nd after the tender offer expires, the acquirer should disclose the results of the tender offer.

    Article 33rd expires, make a partial offer the purchaser shall in accordance with the conditions stipulated in the offer to purchase the shares of the shareholders of the acquired company, exceeds a predetermined number of offer shares acquisition number, purchaser shall, in accordance with the same proportion of tender offer for shares of: to make a general offer to buy are the shareholders of the acquired company shall purchase all shares.

    Fifth regulation and legal liability Article 34th public company directors do not honor the diligence obligations in good faith, by acquiring gain unfair advantage, the China Securities Regulatory Commission to take regulatory measures such as regulatory talks or issue a letter of warning, if the circumstances are serious, to found it unsuitable.

    Suspected of a crime, and handed over to judicial organs for criminal responsibility according to law.

35th purchaser in tender offer at the expiration of the term, does not pay the purchase price in accordance with the contract or purchase of shares, within 2 years from the date of the facts may not be purchased by the public company suspected manipulation of the securities market, the China Securities Regulatory Commission to investigate the purchaser, shall be investigated for legal responsibility.

    Financial advisers employed by the purchaser in the preceding paragraph there is insufficient evidence to indicate that their due diligence, and depending on the seriousness of the CSRC, take 3 months to 12 months from the date of confirmation not accepted within the certificate issued by the relevant special files, 12 months to 36 months does not accept signing officers of special documents issued by regulatory measures, and investigated for legal responsibility according to law.

36th article public company holding shareholders and actual control people in transfer its on company of control right, not settlement its on company of liabilities, not lifted company for its provides of guarantees, or not on its damage company interests of other case made corrected of, and was acquisition company Board not on Qian said case timely disclosure and take effective measures maintenance company interests of, China SFC ordered corrected, in corrected Qian acquisition people should suspended acquisition activities.
Acquired company's Board of Directors failed to take effective measures to promote company's controlling shareholder, actual control to correct it, or after the completion of the acquisition failed to induce the acquirer to comply commitment, arrangements or assurances, Director of China Securities Regulatory Commission has the right to found unsuitable.

    37th article public company of acquisition and the related shares interests changes activities in the of information disclosure obligations people, not according to this approach of provides perform information disclosure and other related obligations, or information disclosure file in the has false records, and misleading sex statement or major missed of, China SFC take ordered corrected, and regulatory talk, and issued warning letter, and ordered suspended or terminated acquisition, regulatory measures; plot serious of, mutatis mutandis securities method 193th article, and No. 213 article for administrative punishment,

    And market entry measures can be taken; a suspected crime, transferred to judicial organs for criminal responsibility shall be investigated according to law.

    Article 38th and concerted action to avoid legal procedures and obligations of investors, public company acquisitions disguised, or circumvent the jurisdiction of the foreign investors, the CSRC shall order rectification, issue a warning letter, suspended or stopped acquisitions and other regulatory measures are serious, administrative punishment, and market entry measures can be taken; a suspected crime, handed over to judicial organs for criminal responsibility according to law.

    39th article for public company acquisition issued audit report, and legal submissions and financial consultant report of securities service institutions or securities company and professionals, not law perform duties of, China SFC take ordered corrected, and regulatory talk, and issued warning letter, regulatory measures; plot serious of, mutatis mutandis securities method No. 223 article for administrative punishment, and can take market ban into of measures; suspected crime of, law transferred judicial organ held criminal.

    40th article of any knowledge acquired before the information disclosure law related information, leaked the information, buy, sell or recommend people buy and sell shares of related companies, mutatis mutandis, article No. 202 of the securities law penalties; a suspected crime, transferred to judicial organs for criminal responsibility shall be investigated according to law.

    41st fabricating, spreading false acquisition information, manipulation of the securities market or engage in fraud, mutatis mutandis, the securities law No. 203, 207 shall be punished; a suspected crime, transferred to judicial organs for criminal responsibility shall be investigated according to law.

    42nd the CSRC public company acquisitions and activities related to changes in interests in shares of parties in violation and corrective action recorded in the credit file.

    The sixth chapter supplementary articles

    Persons acting in concert in 43rd article of the rules, public control of the company and shareholding ratio calculation in the light of the relevant provisions of the administrative measures for the acquisition of listed companies.

    44th financial consultants that provide services for the acquisition of a public company's business license, business rules, and legal responsibilities of listed company mergers and financial advisory business management in accordance with the relevant provisions of the measures implemented.

    Article 45th market maker holding the public disclosure of information related to changes in interests in shares of the company, shall be determined separately by the China Securities Regulatory Commission.

    Article 46th stock transfer of shares is not in the national system of the public public company acquisitions and related changes in interests in shares of the information disclosed, mutatis mutandis, the relevant provisions of the measures implemented. 47th article of the rules as of July 23, 2014.