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Guidelines set for bad asset sales to foreigners
(Shenzhen Daily)
Updated: 2004-12-31 10:36
China's top foreign exchange regulator has issued guidelines governing the
sale and disposal of the country’s bad assets to foreign investors.
The State Administration of Foreign Exchange (SAFE) said it was creating a
regulatory framework to safeguard the interests of all parties involved in such
deals.
The rules, which take effect Jan. 1, create another layer in the approval
process for the deals, reflecting the rigid controls on China’s foreign exchange
regime.
They also come as the nation’s biggest banks try to quickly reduce their
non-performing loans before listing overseas.
Once a proposed bad asset sale clears the regulatory hurdles and the
transaction has been completed, the details must be submitted to SAFE within 15
working days, SAFE said in a statement on its Web site.
The asset management firms are China Huarong Asset Management Co., China
Great Wall Asset Management Corp., China Orient Asset Management Corp., and
China Cinda Asset Management Corp.
Foreign investors will also have to send details of such sales to SAFE before
the foreign exchange regulator allows the funds to be taken out of the country.
Foreign-Chinese joint ventures created with non-performing assets as part of
an equity injection should adhere to existing rules governing foreign-invested
enterprises, SAFE said.
In a separate statement, the China Banking Regulatory Commission (CBRC) said
Wednesday that as of the end of November, China’s four asset management firms
had disposed of 605.3 billion yuan (US$73 billion) in bad assets.
At the same time, the firms have recovered 121.6 billion yuan in cash and
38.2 billion yuan in non-cash assets.
Huarong, Great Wall, Orient and Cinda were created in 1999 by the government
to handle the non-performing assets of China's four biggest State banks.
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