The Law Issues On Property In The Process Of Red-Chip Listing Of State-Owned Enterprises

In recent years, many enterprises have been listed overseas in the form of red-chip. However, most of them are private enterprises and state-owned enterprises are seldom listed in this way. Many legal issues on properties appear due to the defects in the structure of corporate governance, and the large number of wholly-owned, controlled and participated companies and the large number and wide distribution of properties owned, the flaws in property rights, and the requirements of the conformity of not only the Law of China but also the overseas listing rules. The essay describes the legal issued and provides the possible solutions by the types of properties.The properties rights of state-owned enterprises are divided into three categories: The first is own properties, which involves mainly the following issues in the process of red-chip listing: 1. on the unclear rights of own properties the key solution to which are the cooperation of the enterprises and the properties assessment agencies to define the properties boundaries of affiliated company; enterprises with subsidiaries define properties boundaries; 2. on the restriction of montage by some rights of own properties, which shall be discharged prior to the lifting of Al Form to HKSE; 3. on the lack of documents by some rights of own properties, which shall be separated prior to the lifting of A1 Form to HKSE; 4. on the allocated land within the majority of owned properties, which shall be altered to transferred land thought the payment of land use right transfer fund before the lifting of Al Form to HKSE; 5. on the registration of title change of land use rights and housing ownership and others which relates to the taxes and fees of the change of the registration of the title and the rights of not transferred properties; 6. on the construction works, some of which shall be reapply for permit that lacks prior to the hearing.The second is the properties rented from affiliated parties, which involves mainly the following issues in the process of red-chip listing: 1. the difficulty in the determination of affiliated parties, which should be determined though wide inquiry according to the regulations of HKSE; 2. the large amount and value of the properties rented from affiliated parties, which should be restricted; 3. the violation to red-chip companies by rent prices, which should be determined according to the market; 4. the lack of documents by some properties rented from affiliated parties, which is discussed in Part III; 5. the lack of reporting by rent of the properties from affiliated parties, which is also discussed in Part III.The third category is the Properties rented from the third-party which involves mainly the following issues in the process of red-chip listing: 1. the difficulty in the determination of the number of the properties rented from the third-party, requires the cooperation of the enterprises and the properties assessment agencies to define the properties boundaries of affiliated company; 2. the nonstandard of the renting contract of the properties from the third-party, which should be resigned or modified according to the counsel texts; 3. the lack of documents by some properties rented from the third-party, which does not invalid the contract and the lessor shall pay the damage in case of inability of correct use due to which; 4. the Lack of reporting by rent of the properties from the third-party, which may incurs the lessor of administrative punishment.