| 90% of Chinese firms adopt shareholder reform |
BEIJING, Nov. 24 (Xinhua) -- Ninety percent of Chinese firms have complied with orders to reform their share structure by selling previously non-tradable shares, said Qi Bin, director of the Research Center of the Chinese Securities Regulatory Commission, here on Friday.
The proportion represents 1,161 of the firms that were ordered to complete the reform by the end of this year. Their aggregated market value took up nearly 96 percent of the total of the Shanghai and Shenzhen stock markets.
The reform has yet to be carried out by another 130 firms. Many of them have serious problems such as huge losses or non-tradable equity that has been used as collateral or frozen by the courts or banks.
Securities regulators have encouraged those in difficulty to facilitate reform by inviting mergers and acquisitions.
As the reform enters its final phase, regulators face more challenges in relation to the improvement of stock issuance, trading and regulating systems, the attraction of more qualified investors and the protection of minority investors, Qi said.
The reforms, also known as split share structure reform, are among measures the government has taken over the past year -- along with legislative reforms for listed firms and corporate governance reforms -- to revive the capital market and improve its financial security.
The split share structure refers to the existence of both tradable shares and non-tradable shares owned by the state.
Listed companies have to offer additional shares or funds to private investors as compensation for potential losses in the value of their portfolios when the state-owned shares hit the market.
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