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Ban on officials selling shares to their relatives

Executives of state-owned companies are to be barred from selling stakes in units of their companies to relatives, the state-owned assets regulator said yesterday.

The new regulation is an addition to rules issued last October which barred middle and senior management owning shares in state-owned enterprise affiliates, subsidiaries or other SOE-invested businesses.

They have to sell their holdings or resign within a year of the rules becoming effective, and they can't sell to relatives or to companies they control, according to the State-owned Assets Supervision and Administration Commission.

The rules are aimed at regulating the restructuring of state-owned enterprises, strengthening corporate management, preventing losses of state-owned assets and protecting the rights and interests of companies and employees.

Many employees have invested in their companies in recent years to participate in the revamping of SOEs. This has played an important role in promoting reform and enhancing the competitiveness of the companies. But a lack of uniform standards and irregular practices resulted in several problems during the process.

The commission said in a separate statement yesterday that centrally-administered state-owned enterprises must submit a report of dividends they should pay to the government by the end of this month.

Since 2007, SOEs have been required to offer 5 percent to 10 percent of earnings as dividends, depending on their industries, to the central government to finance the nation's strategic planning and for social security purposes.

Last year, SOEs earned a total of 665.29 billion yuan (US$97.37 billion), 30 percent less than the year before due to natural disasters and the financial crisis.


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