SASAC Denies Report on Reducing State-owned Shares

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Last updated at: (Beijing Time) Thursday, July 24, 2003

SASAC Denies Report on Reducing State-owned Shares

China will not draft and implement rules to sell state-owned shares until a "reliable and well-accepted" method is found, said Ma Jiantang, spokesman of the State-owned Assets Supervision and Administration Commission (SASAC)

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The State-owned Assets Supervision and Administration Commission (SASAC) Wednesday denied reports that the commission had planned a new scheme to reduce State holdings in domestic listed companies through the stock market.

The commission has not come up with a sound and feasible plan to further the State share sell-down, said Ma Jiantang, SASAC deputy secretary-general and spokesman, at a press briefing Wednesday in Beijing.

Until such a plan is finalized, the government would not take any hasty action to float State shares, he said.

A report in the Economic Observer newspaper said on Tuesday that the SASAC research centre had finished a study that mapped out a new scheme to reduce State holdings in listed companies, including launching a new C-share market to liquidate the now non-tradable institutional shares and open over-the-counter trading for the State-owned shares.

But Ma said that was only the personal opinion of the researcher who provided the information, but this did not reflect the stance of the commission.

"The report is unfounded,'' said Ma.

SASAC has included the drafting of a provisional regulation on the transfer of State shares in listed companies within this year's legislative schedule, he said.

But that only targets the transfer through private negotiations and will not cover the sell-down through the secondary stock market, in which social investors can directly buy and sell the stocks.

China had tried floating the non-tradable State holdings in the secondary market in mid 2001 to finance the social security sector. But the experiment was stopped last June amid strong market reaction, as stock indices fell on fear of a quick market expansion and the irrational pricing system.

The government never gave a timetable as to when the experiment would be resumed. Li Rongrong, minister of SASAC, said recently that reducing and liquidating State holdings in listed firms complied to the reform trend, but with many irregularities to clear up, it requires much prudence and hard work to find a widely acceptable plan.

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