Rule forces brokerage to sell 53% stake
By Winny Wang |
June 3, 2010, Thursday
|
Print Edition
Print Edition
CITIC Securities Co plans to sell a 53 percent stake in China Securities Co for 8.59 billion yuan (US$1.26 billion) to meet regulatory requirement.
The country's largest listed brokerage plans to sell its stake via an exchange of equities through an open bidding process, Citic Securities said in a statement to the Shanghai Stock Exchange yesterday. It will still hold 7 percent of China Securities after the sale, the brokerage said.
The China Securities Regulatory Commission requires that brokerages not run the same business with subsidiaries in which they own a controlling stake to avoid horizontal competition. The brokerages also can't own more than 49 percent of a fund company.
Citic Securities said in March that it planned to transfer parts of its stakes in two subsidiaries, China Securities and wholly-owned China Asset Management Co, to comply with the regulation.
The brokerage set up China Securities in 2005 jointly with China Jianyin Investment Securities with a registered capital of 2.7 billion yuan. Citic Securities holds 60 percent, and Jianyin owns 40 percent.
The revenue of China Securities totaled 4.5 billion yuan in the first nine months of last year and its net income reached 2.08 billion yuan, according to the statement.
Citic Securities' total assets will fall 32.78 percent and net assets will fall 6.94 percent after the stake transfer, the statement said.
The country's largest listed brokerage plans to sell its stake via an exchange of equities through an open bidding process, Citic Securities said in a statement to the Shanghai Stock Exchange yesterday. It will still hold 7 percent of China Securities after the sale, the brokerage said.
The China Securities Regulatory Commission requires that brokerages not run the same business with subsidiaries in which they own a controlling stake to avoid horizontal competition. The brokerages also can't own more than 49 percent of a fund company.
Citic Securities said in March that it planned to transfer parts of its stakes in two subsidiaries, China Securities and wholly-owned China Asset Management Co, to comply with the regulation.
The brokerage set up China Securities in 2005 jointly with China Jianyin Investment Securities with a registered capital of 2.7 billion yuan. Citic Securities holds 60 percent, and Jianyin owns 40 percent.
The revenue of China Securities totaled 4.5 billion yuan in the first nine months of last year and its net income reached 2.08 billion yuan, according to the statement.
Citic Securities' total assets will fall 32.78 percent and net assets will fall 6.94 percent after the stake transfer, the statement said.
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