SHANGHAI (Reuters) - China’s securities regulator said that company ownership reform plans must strictly abide by existing regulations, hinting there will be no repeat of the special treatment given to China Unicom (600050.SS) in its $11.7 billion restructuring.
The China Securities Regulatory Commission (CSRC) said in a statement on Friday that it would “continue to support mixed-ownership reforms” of state-owned firms. However, it warned major shareholders that “any items related to the capital markets must strictly stick to existing laws, regulations and rules published by the securities regulator”.
China Unicom recently unveiled plans to raise 77.9 billion yuan ($11.7 billion) through an ownership reform plan that some observers saw as a model case for revitalizing Chinese state firms with private capital.
The deal immediately raised eyebrows among Chinese media and investors, who suspected it may have violated rules on private placements in terms of deal size and pricing mechanism after the CSRC revised its rules in February.
The CSRC reiterated on Friday that the deal was being treated as an exceptional case, due to the “major significance” of China Unicom’s reforms.
The deal, in which Unicom’s Shanghai-listed unit will tap more than a dozen major investors, including Alibaba Group (BABA.N), Tencent Holdings (0700.HK) and Baidu (BIDU.O), for funds, caused confusion among investors when it was announced this month.
Reporting by Samuel Shen and John Ruwitch; Editing by Susan Fenton