Reuters first to report that China may clamp down on variable interest entities
09.20.2011
Investors were advised to be cautious after an exclusive report by Reuters that China’s security regulator is asking the government to clamp down on the controversial corporate structure used by companies such as Sina and Baidu to list overseas. Lawyers at four different firms in China and Hong Kong said they have seen an internal report which asks China’s state Council, or cabinet to take action against the structures know as Variable Interest Entities (VIEs). According to lawyers, this change could jeopardize the way in which Chinese companies list overseas or receive foreign investment.
The exclusive report went out late on Sunday night and sparked a wave of discussion on various China blogs as well as in the legal and private equity community. The report was also cited in a Private Equity Alert issued by Weil Gotshal and discussed by panelists at the SuperReturn Private Equity conference in Hong Kong by international counsel for Debevoise & Plimpton.
To read the full story click: http://r.reuters.com/meh83s
