國(guó)家外匯管理局關(guān)于境內(nèi)居民通過(guò)境外特殊目的公司融資

1、Legal Issues in Private Equity and Listings for Chinese Companies Mason Ching, LL.M.PrincipalMason Ching & Associates16 October 2008Speakers ProfileMason Ching is the founder of Mason Ching & Associates. He is qualified to practise in Hong Kong and England & Wales and holds an LLM degree with distin

2、ction in technology and investment laws. His experience is gained in Baker & McKenzie. His expertise is in venture investment, PRC direct investment, fund establishment, securities, listing, takeovers and other corporate finance matters. Convertible Loan Preference Shares Series A or Series B Conver

3、tibleRedeemableVotingPreferenceWarrantsCommon SharesForm of Private Equity InvestmentBoard seatsVeto rights on certain key actionsInformation rightsProfit guarantee and price adjustmentWhen to convertRights of preferred sharesTerms of investmentPre-emptive Right / Right of ParticipationRight of Firs

4、t RefusalCo-sale / Tag-alongDrag-alongAnti-dilutionDown-side price protection Full Ratchets or Weighed AverageProtective ProvisionsNon-compete covenants from controlling shareholdersPut back option if IPO does not take placeConfidentialityFounders guaranteeFounders provision of security Founders ind

5、emnityProtective ProvisionsVendor sale at the time of IPOPlacing after lock-upIssue of derivatives: warrants, exchangeable / convertible bond Repurchase by issuerPrivate Placements / Block TradeExit - IPORepurchase by investee companyPut back to founders Trade saleForced trade saleReverse takeoversL

6、iquidationExit Aborted IPOHong Kong Regulatory IssuesListing DecisionsConversion Price“toxic convertibles”Lock-upTargetSOEsPrivate EnterpriseStructure Red ChipDirect InvestmentInvesting into ChinaInvestment in legal person sharesValuationApproval processRestrictions on disposal of promoters sharesPR

7、C Company Law shares issued by a company prior to the public offering of shares shall not be transferred within one year from the Listing DateManagement buy-outsInvestment in H shares Discount on IPO Price Investing into China H Share potentialsPing An Insurance (Group) Company of China Ltd. (2005)G

8、oldman Sachs and Morgan Stanley invested in 1994Dai-Ichi Mutual Life InsuranceHSBC Insurance subscribed for 10% equity interest (legal person shares) in 2002Legal person shares converted into H SharesCase Studies Ping AnRed chip restructuring Relevant PRC LawsNotice of the State Administration of Fo

9、reign Exchange on the Relevant Issues Concerning Foreign Exchange Administration of Financing and Returning Home Investment by Domestic Residents through Special-purpose Companies (國(guó)家外匯管理局關(guān)于境內(nèi)居民通過(guò)境外特殊目的公司融資及返程投資外匯管理有關(guān)問(wèn)題的通知) issued by The State Administration of Foreign Exchange (SAFE) on 21 November

10、 2005Notice on Relevant Issues in the Registration of the Offshore Investments of Individual Domestic Residents and Foreign Exchange Registration of Mergers and Acquisitions by Foreign Investors (國(guó)家外匯管理局關(guān)于境內(nèi)居民個(gè)人境外投資登記及外資并購(gòu)?fù)鈪R登記有關(guān)問(wèn)題的通知) issued by SAFE on 21 April 2005Notice on Relevant Issues in Perfe

11、cting Foreign Exchange Control in Mergers and Acquisitions by Foreign Investors (關(guān)于完善外資并購(gòu)?fù)鈪R管理有關(guān)問(wèn)題的通知) issued by SAFE on 24 January 2005 Private Enterprises (non-H Share Listing) No.75 Notice“Returning home investment” - direct investment activities carried out inside China by residents inside China

12、through a special purpose company:to acquire or swap the interest of the Chinese party in an enterprise inside China; to establish a FIE inside China and acquire control of assets inside China through that FIE; Foreign exchange registrationRepatriation and use of fundsProvisions of the Ministry of C

13、ommerce, State-owned Assets Supervision and Administration Commission of the State Council, the State Administration of Taxation, the State Administration for Industry and Commerce, Securities Regulatory Commission of China and the State Administration of Foreign Exchange on Mergers and Acquisitions

14、 of Domestic Enterprises by Foreign Investors (2006Revision)Took effect on 8 September 2006Applies to domestic enterprises onlyMOC and CSRC approval required for restructuring and oversea listing of a special purpose vehicle Share swap allowedUnwind after 12 months failing listingPrivate Enterprises

15、 (non-H Share Listing) Private Enterprises (non-H Share Listing)Notice of the General Affairs Department of the State Administration of Foreign Exchange on Printing and Distributing the Operating Rules for the Notice of the State Administration of Foreign Exchange on the Relevant Issues about Foreig

16、n Exchange Control over the Financing and Return Investment of Domestic Residents through Overseas Special Purpose Companies (No. 106 2007 of the General Affairs Department under the State Administration of Foreign Exchange) (國(guó)家外匯管理局綜合司關(guān)于印發(fā)國(guó)家外匯管理局關(guān)于境內(nèi)居民通過(guò)境外特殊目的公司融資及返程投資外匯管理有關(guān)問(wèn)題的通知操作規(guī)程的通知(2007修改) 匯綜發(fā)

17、2007106號(hào)) 2007-05-29Successful Structure for Red-Chip Original Shareholders do not retain control post-IPOTransfer of AssetsThird party involvementCase Study Solargiga Energy Holdings Limited (Stock Code 757)Mr. TANSECHuaxin SiliconPLCJinzhou Xinri(PRC)Jinzhou Yangguang(PRC)Jinzhou Huari(PRC)Jinzhou

18、 Huachang(PRC)74.1%75%25.83%25%70%30%25%75%100%Solargiga After restructuringWWICTIL(BVI)Company(Cayman Islands)SECMr. TANOther Relevant OfficersOther ShareholdersMr. CHONGSolartech(Cayman Islands)BVI CompanyJinzhouXinri(PRC)Jinzhou Huari(PRC)Jinzhou Yangguang(PRC)Jinzhou Huachang(PRC)Jinzhou Youhua

19、(PRC)Shanghai Jingji (PRC)33%100%100%3.12%16.3%8.55%10.61%28.42%100%100%100%100%100%100%100%Case Study Xingfa Aluminium Holdings Limited (Stock Code 98)Messrs. Luo Su, Luo Riming and Liao YuqingXingfa GroupXingfa AluminiumXingfa SGXingfa BVIXingfa Curtin WallOur CompanyLeahin CoatingXingfa Innovatio

20、n100%100%100%100%100%100%51%91.3%Case Study JES Singapore Acquisition of assets, liabilities, operations and businessProcessing AgreementRestricted Cash Account AgreementDebt Repayment AgreementFixed Assets Lease AgreementEntrusted Loan AgreementRestricted for Foreign investment Fixed lineTobaccoICP

21、 Internet contentsMobile contents mobile phone entertainmentDigital publication online gameInvesting in Restricted CategoriesSpecial StructureNeed to consolidate accounts Loan agreementOption agreementEquity pledgeUndertaking / power of attorneyTechnical service / business agreementTrade name and co

22、pyright licenseInvesting in Restricted CategoriesListing Decision LD 43-3 (2005) Company APRC Subsidiaries Structure ContractsOwning all operating licences to perform the Groups businessRegistered Owners Structure ContractsOwning all intellectual propertiesOPCOOutside PRCInside PRC100%100%Direct Inv

23、estment VehicleForeign-invested EnterprisesEJV, CJV and WFOEForeign-invested Joint Stock CompaniesRMB FundSet up a WFOEDirect InvestmentConvertible Loan / WarrantsPreference Shares Series A or Series B ConvertibleRedeemableVotingDirect InvestmentRepurchase by issuerPrivate Placements / Block Trade -

24、 Measures for Administration of Strategic Investment by Foreign Investors in Listed Companies（外國(guó)投資者對(duì)上市公司戰(zhàn)略投資管理辦法） 2006-02-01Put back to founders Trade saleForced trade saleReverse takeoversLiquidation - Measures for Liquidation of Enterprise with Foreign Investment Direct InvestmentRMB Fund對(duì)外貿(mào)易經(jīng)濟(jì)合作部

25、、科學(xué)技術(shù)部、國(guó)家工商行政管理總局、國(guó)家稅務(wù)總局、外匯管理局令2003年第2號(hào)（Promulgated by the Ministry of Foreign Trade and Economic Cooperation， Ministry of Science and Technology， State Administration for Industry and Commerce， State Administration of Taxation and State Administration of Foreign Exchange on 30 January 2003 and effe

26、ctive as of 1 March 2003.）RMB Fund Regulationsthe number of investors shall be more than two and less than 50， and there shall be at least one requisite investor as specified in Article 7；the minimum amount of capital contribution a Non-legal Person Venture Investment Enterprise - US$10 milliona Cor

27、porate Venture Investment Enterprise - US$5 million. having a clear organizational form；having a clear and legitimate investment direction；at least three professional management personnel with experience in venture investment business； andother conditions stipulated by laws and administrative regula

28、tions.RMB Fund Regulationhaving venture investment as its main line of business；having cumulative capital under its management of not less than US$100 million in the three years before the application， and at least US$ 50 million of which has been used for venture investment. having at least three p

29、rofessional management personnel with not less than three years experience in venture investment business；not have been prohibited by the judicial authorities or other relevant regulatory authorities of their own countries from engaging in venture investment or investment and consultancy business，or subjected to penalty for reasons such as fraud；capit