The debt equity swap plan and agreement shall be

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Unformatted text preview: nd signs the swap agreement with the enterprise. The debt-equity swap plan and agreement shall be subject to the examination of the SETC, the Ministry of Finance and the PBOC, and the implemented at the approval of the State Council. Article 19: Enterprises that practice the debt-equity swap shall transform their operational mechanism, establish a standardized structure featuring the governance by corporate legal person, and enhance enterprise management according to the requirement of the modern enterprise system. Local government shall assist enterprises in cutting payroll, increasing returns, diverting the laid-off workers and freeing the enterprises from extra social functions. Article 20: Following the debt-equity swap, a financial asset management company, as a shareholder of the enterprise, may dispatch personnel to join the enterprise's board of directors and board of supervisors to exercise their shareholder rights according to law. Article 21: Enterprise equity held a financial asset management company may be transferred to domestic and overseas investors according to related regulations or re-purchased by the enterprises involved in the debt-equity swap according to law. Article 22: After the enterprise implements the debt-equity swap, it shall register the changes in its property rights according to the related regulations. Article 23: The SETC is responsible for the organization, guidance and coordination of the debt equity swap. Chapter V: Company Operation And Management Article 24: Financial asset management companies shall adopt the responsibility system for operational objectives. The Ministry of Finance Determines the operational objectives for handling bad loans by financial asset-management companies according to the quality of the bad loans, and carries out the evaluation and supervision. Article 25: Financial asset management companies shall make operational policies and related measures in accordance with the characteristics of the bad loans, improve internal management, and establish internal restriction and motivation mechanisms. Article 26: Financial asset management companies shall manage and handle assets formed with the bad loans purchased from state-owned banks in accordance with the best principles of openness, competition and selection. - Financial asset management companies shall transfer assets primarily through bidding and auction. If the financial claims of a financial asset management company cannot be paid off, due to such reasons as the debtor's bankruptcy, matters shall be handled according to the regulations of the state council. The Ministry of Finance shall draft procedures concerning the management and handling of assets by finance asset management companies. Article 27: Financial asset management companies may, if necessary, invite qualified intermediary institutions to take part in accounting, assets appraisal and legal services. Article 28: Financial asset management companies are exempt from taxes in their purchase of bad loans from state-owned banks, or in their undertaking and handling of assets formed with the...
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This document was uploaded on 03/12/2014.

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