Legislature debates share repurchasing changes
Print Edition
A draft amendment on China’s Company Law, concerning share repurchasing, was yesterday submitted to the country’s top legislature for deliberation.
The Standing Committee of the 13th National People’s Congress will review the draft, which aims to refine and improve the current share repurchasing system.
Proposed changes include adding circumstances of application, easing decision-making procedures and introducing information disclosure requirements for companies in reclaiming shares. Under the current law, companies are forbidden from buying back their publicly traded shares except under four circumstances, such as granting employees equity incentives.
“The amendment is very necessary in that it will help companies establish a long-term motivation mechanism and improve the quality of listed companies,” Liu Shiyu, chairman of the China Securities Regulatory Commission, said in his introduction on the amendment to the legislature.
“It will also offer strong legal support for stabilizing capital market expectations under the current conditions.”
Share repurchasing is believed to be a necessary corporate tool in conducting mergers, acquisitions and restructuring, and plays a vital role in improving governance structure and stabilizing share prices.
Meanwhile, China’s top legislature is considering a change in the intellectual property right appeals procedure, which would hand the Supreme People’s Court cases that require more expertise.
“The SPC will have a national appeal court for civil and administrative IPR cases,” said Chief Justice Zhou Qiang.
“Due to the complexity of IPR cases and expertise needed for their trials, a national appeal court will help prevent inconsistency of legal application and improve the quality and efficiency of trials,” Zhou said.
The legislature also reviewed draft revisions to the law on international criminal judicial assistance, with a special chapter on the transfer and management of offenders added. With a growing demand for the transfer and management of offenders between China and other countries, it is necessary to make special regulations for better international cooperation, said Zhou Guangquan, vice chairman of the NPC’s Constitution and Law Committee.
If an offender is a citizen of a receiving country and if their acts constitute a crime in both countries, they can be transferred home for criminal punishment. Such a transfer can only be made with the permission of the two countries and the offender in question, the draft law stated.
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