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Listed companies to transfer state-owned shares to Social Security Fund

(Xinhua)
Updated: 2009-06-19 20:43

BEIJING: Some listed Chinese companies will have to transfer part of their state-owned shares to the National Social Security Fund as the country prepares for an aging society, the government said Friday.

The measure applies to 131 state-controlled companies that have listed on domestic stock exchanges. Their current market capitalization is 63.93 billion yuan (about 9.4 billion U.S. dollars), according to the Ministry of Finance. No list of companies was released, however, nor was any date provided for the transfer.

Shares transferred to the national pension fund must amount to 10 percent of the total in the initial public offerings, under a State Council (cabinet) decision.

If the amount of state-owned shares is not sufficient to meet the 10-percent requirement, the company must transfer all state-owned shares that it holds, according to the Ministry of Finance and China Securities Regulatory Commission.

The move was part of the government's effort to finance the country's social security system and the retirement of the aging population, the government said.

The fund would not only inherit the lock-up period of the transferred shares, but also extend the period by another three years.

The extended lock-up period would boost investor confidence and aid the long-term stable and healthy development of the securities market, said the government.