China approves restructure of bank’s parent company

Out-Law News | 06 Aug 2014 | 10:01 am | 1 min. read

China’s state council (cabinet) has approved proposals to restructure the China Everbright (Group) Corporation, the parent company of the Shanghai and Hong Kong-listed China Everbright Bank Company Limited (CEB).

Bank chairman Shuangning Tang said (2-page / 64 KB PDF) that the corporation will be transformed from a wholly state-owned enterprise to a joint stock company known as the ‘China Everbright Group Corporation’.

The new company will be jointly promoted and established by China’s finance ministry and the state-owned investment company Central Huijin Investment Ltd.

Tang said the ministry's capital contribution will comprise of its equity interest in China Everbright (Group) Corporation, its equity interest in China Everbright Holdings Company Ltd and the principal and interest of the credit extended to China Everbright (Group) Corporation by the ministry.

The capital contribution of Huijin will comprise the nine billion shares it holds in CEB, its equity interest in China Everbright Industrial (Group) Company Ltd and the principal and interest of the loans from the People's Bank of China. Tang said the restructuring would be led by the Chinese government.

China Everbright (Group) Corporation's businesses have covered bank, securities, insurance, trust, investment bank and assets management since its founding in 1983.

CEB, established in 1992, has its headquarters in Beijing. In August 2013, China’s state-run Xinhua news agency reported that the bank had signed a strategic cooperation agreement with telecom giant China Unicom to develop business in mobile finance. Xinhua said that in addition to focusing on mobile payment services the bank would promote the development of commercial applications.

In July 2014, China approved the launch of three private banks as part of plans to extend financial reforms and open up the country’s banking sector. One of the new institutions will be Chinese internet provider Tencent’s ‘Webank’, to be based in Shenzhen.