Listed Companies May be Exempted From VIEs Regulation, Chinese Media Reports Posted on September 26, 2011
 (iChinaStock News) Investors of Chinese listed Internet companies such as Sina(NASDAQ:SINA) and Baidu (NASDAQ: BIDU) may feel relieved, as China’s top regulator is reportedly to consider giving exceptions to the listed Chinese companies in the upcoming VIEs regulation.
The Economic Observer, one of China’s most renown business newspapers, said on September 24 that the listed Chinese Internet companies are likely to be excepted from China’s forthcoming regulation over Variable Interest Entities (VIEs) investment structure. But companies that have not yet to launch their IPOs may be subjected to the new regulation, the report said.
The newspaper cited an anonymous source who has seen the report that China Securities Regulatory Commission (CSRC) submitted to China’s State Council, or cabinet, saying that the Chinese top leaders suggest “old rules for old companies and new rules for new companies” (?????,?????) in their directives to the VIEs regulation.
VIEs is a company structure adopted by many Chinese Internet companies that allowed foreign investors to participate in China’s Internet industry. Chinese regulators have lone been turn a blind eye on the structure until the Alipay issue, which triggered intense debates among public and regulators about the legitimacy of VIEs.
Investors’ concerns over China’s possible VIEs regulation has resulted in a market panic last week of Chinese listed Internet companies, most of which are under the VIEs company structure.
But many analysts in China believe that such regulatory risk is overblown. Xie Wen, former head of Yahoo China, said in an interview with iChinaStock that Chinese government will never ban VIEs.
The Economic Observer also reported that the detail of the VIEs regulation may be announced in the next six months.
By Wang Xing, iChinaStock.com
news.ichinastock.com |
