Article 15 The funds as raised through public offer of stocks as made by a
company shall be used according to the purpose as prescribed in the prospectus.
Any alteration of the use of funds as prescribed in the prospectus shall be
subject to a resolution of the general assembly of shareholders. In case a
company fails to correct any unlawful alteration of its use of funds or where
any alteration of its use of funds fails to be adopted by the general assembly
of shareholders, the relevant company may not make any IPO of stocks. In the
foregoing circumstance, a listed company may not make any non-public offer of
stocks.
Article 16 A public issuance of corporate bonds shall satisfy the following
requirements:
(1) The net asset of a stock-limited company being no
less than RMB 30 million yuan and the net asset of a limited-liability company
being no less than RMB 60 million yuan;
(2) The accumulated bond
balance constituting no more than 40 % of the net asset of a
company;
(3) The average distributable profits over the latest 3 years
being sufficient to pay the 1-year interests of corporate bonds;
(4)
The investment of raised funds complying with the industrial policies of the
state;
(5) The yield rate of bonds not surpassing the level of interest
rate as qualified by the State Council; and
(6) Meeting any other
requirements as prescribed by the State Council. The funds as raised through
public issuance of corporate bonds shall be used for the purpose as verified and
may not be used for covering any deficit or non-production expenditure. The
public issuance of convertible corporate bonds as made by a listed company may
not only meet the requirements as provided for in paragraph 1 herein but also
meet the requirements of the present Law on public offer of stocks, and shall be
reported to the securities regulatory authority under the State Council for
examination and approval.
Article 17 With regard to an application for public issuance of corporate
bonds, the following documents shall be reported to the department as authorized
by the State Council or the securities regulatory authority under the State
Council:
(1) The business license of the company;
(2) The
constitution of the company;
(3) The procedures for issuing corporate
bonds;
(4) An assent appraisal report and an asset verification report;
and
(5) Any other document as prescribed by the department as
authorized by the State Council or by the securities regulatory authority under
the State Council. In case a recommendation party shall be employed, as
prescribed by the present Law, the Recommendation Letter of Issuance as produced
by the recommendation party shall be submitted as well.
Article 18 In any of the following circumstances, no more public issuance of
corporate bonds may be carried out:
(1) Where the corporate bonds as
issued in the previous public issuance haven't been fully
subscribed;
(2) Where a company has any default on corporate bonds as
publicly issued or on any other liabilities, or postpones the payment of the
relevant principal plus interests, and such situation is still continuing;
or
(3) Where a company violates the present Law by altering the use of
funds as raised through public issuance of corporate bonds.
Article 19 The formats and reporting ways of application documents as
reported by an issuer for examination and approval of securities issuance
according to law shall be prescribed by the legally competent organ or
department in charge of examination and approval.
Article 20 The application documents for securities issuance as reported by
an issuer to the securities regulatory authority under the State Council or the
department as authorized by the State Council shall be authentic, accurate and
integrate. A securities trading service institution and its staff that produces
the relevant documents for securities issuance shall strictly perform its/his
statutory duties and functions and guarantee the authenticity, accuracy and
integrity of the documents as produced thereby.
Article 21 Where an issuer files an application for an IPO of stocks, it
shall, upon submitting the application documents, disclose the relevant
application documents in advance according to the provisions of the securities
regulatory authority under the State Council.
Article 22 The securities regulatory authority under the State Council shall
establish an issuance examination committee, which shall examine the
applications for stock issuance according to law. The issuance examination
committee shall be composed of the professionals from the securities regulatory
authority under the State Council and other relevant experts from outside the
said authority, adopt the means of voting for the determination of applications
for stock issuance and set forth the opinions on examination. The specific
formulation measures, tenure of members as well as work procedures of the
issuance examination committee shall be formulated by the securities regulatory
authority under the State Council.
Article 23 The securities regulatory authority under the State Council shall
take charge of the examination and approval of applications for stock issuance
in light of the statutory requirements. The procedures for examination and
approval shall be publicized and shall be subject to supervision according to
law. The personnel participating in the examination and verification of stock
issuance may not have any interest relationship with an issuance applicant, may
not directly or indirectly accept any present of the issuance applicant, may not
hold any stock as verified for issuance and may not have any private contact
with an issuance applicant. The department as authorized by the State Council
shall conduct the examination and approval of applications for issuance of
corporate bonds by referring to the preceding 2 paragraphs herein.
Article 24 The securities regulatory authority under the State Council or the
department as authorized by the State Council shall, within 3 months as of
acceptance of an application for securities issuance, make an decision on
approval or disapproval according to the statutory requirements and procedures,
whereby the time for an issuer to supplement or correct its application
documents for issuance according to the relevant requirements may not be
calculated within the aforesaid term for examination and approval. In the event
of disapproval, an explanation shall be given in writing.
Article 25 Where an application for securities issuance has been approved,
the relevant issuer shall, in accordance with the provisions of the relevant
laws and administrative regulations, announce the relevant financing documents
of public issuance before publicly issuing any securities and shall make the
aforesaid documents available for public reference in designated places. Before
the information of securities issuance is publicized according to law, no
insider may publicize or indulge the relevant information. An issuer may not
issue any securities before an announcement of the relevant financial documents
of public issuance.
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