SASAC steps up management of overseas state-owned property rights

On 29 September, the State-owned Assets Supervision and Administration Commission (SASAC) issued the Strengthening the Management of Overseas State-owned Property Rights of Central Enterprises Notice (Guo Zi Fa Chan Quan [2011] No. 114). This Notice contains a set of rules that are ancillary to the Administration of Overseas State-owned Property Rights of Central Enterprises Interim Measures. The Notice primarily aims to achieve the following.

• To regulate the holding by individuals of overseas state-owned property rights on behalf of other parties, and the formation of companies with a special purpose such as offshore companies. The Notice requires that central enterprises clean up any irregularities that exist in this respect. For qualified central enterprises, deadlines have been set for completing the clean-up: registration must be altered or cancelled before 31 December in accordance with the Interim Measures, and a report on the clean-up must be submitted in writing to SASAC before 31 March 2012.
• Thoroughly to investigate and verify the situation, and establish a reporting system for overseas property rights. The Notice says central enterprises are required to clean up all equity interests created by their capital contributions to overseas enterprises in various forms, by investigating and checking the number of these overseas enterprises, their geographical distribution, industry sector, property rights structure, percentage of state-owned interest and operational management status, as well as by organizing subsidiaries at different levels promptly to process the registration of overseas state-owned property rights. The Notice further requires central enterprises to establish a system for reporting details about the management of their overseas state-owned property rights, and to report the same in writing to SASAC before 30 April each year.

Business Law Digest is compiled with the assistance of Haiwen & Partners. The authors can be emailed at baochen@haiwen-law.com. Readers should not act on this information without seeking professional legal advice.