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8.5.4. The Deal Shimao Property (0813.HK) – Shanghai Shimao
(600823.SH) – Foreign Acquiror’s Injection of FIEs in
Exchange for the ListCo’s New Shares 208
8.6. Cross-Border Share Exchange by Foreign Acquiror 214
8.6.1. Overview 214
8.6.2. Deal Structures of Foreign Acquiror’s Payment
with Offshore Listed Shares 214
8.6.3. The Procedures of Cross-Border Share Exchange
Involving Offshore Issue 215
8.6.4. The Deal TianjinPort Dev (03382.HK) – Tianjin
Port (600717.SH) – Offshore Listed Foreign
Acquiror’s New Issue in Exchange for the Onshore
ListCo’s Outstanding Shares 223
8.7. Offshore Share Exchange by Foreign Acquiror 223
Chapter 9
QFII Investment 225
9.1. Introduction 225
9.2. Required Approvals and Key Regulations 226
9.3. QFII Qualification by The Csrc 227
9.4. QFII Quota from The Safe 231
9.4.1. Overview 231
9.4.2. Application of the Initial QFII Quota 231
9.4.3. Application of Additional QFII Quota(s) 232
9.4.4. Quota Transfer Prohibited 232
9.5. Custodian Bank as Gatekeeper 233
9.6. Capital Inflow 235
9.6.1. The Opening of Capital Accounts with the Onshore
Custodian Bank 235
9.6.2. Principal Remitted to the Forex Account 236
9.6.3. Settled RENMINBI Transferred to the Special RMB
Account 236
9.7. Securities Investment 237
9.7.1. The Opening of Securities Accounts with the
Clearing House 237
9.7.2. Shareholding Cap 238
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Table of Contents
9.7.3. Trading Rules 240
9.7.4. Disclosure: Short Form Change Report 240
9.7.5. Short-Swing Forfeiture: NANNING SUGAR (000911) V.
MARTIN CURRIE (QFII) 241
9.7.6. Exercise of the Shareholder Rights 243
9.8. Exit 243
9.8.1. Sale upon Expiration of the Shareholding
Lock-up (If Applicable) 243
9.8.2. Statutory Lock-up of the Principal 244
9.8.3. Repatriation of the Investment Principal upon
Expiration of the Attached Lock-up 244
9.8.4. Repatriation of the Gains during, or after, the Principal’s
Lock-up 245
9.8.5. Closure of the Accounts 246
9.9. Special Forex Rules for Open-Ended China Fund 246
9.9.1. Overview 246
9.9.2. Monthly Inward Remittance of Net Subscription
Proceeds of the China Fund 247
9.9.3. Monthly Outward Repatriation of Net Redemption
Amount of the China Fund 248
9.9.4. Separation of the Principal in the Monthly
Repatriation 248
9.10. Taxation 249
Part III
Restructuring 251
Chapter 10
Private Placement (Designated or Price Bidding) 253
10.1. Introduction 253
10.2. Required Approvals and Key Regulations 254
10.3. Special Issues in Private Placement 256
10.3.1. Placement to Designated Subscriber or Through Price
Bidding 256
10.3.2. Issue to Ten Subscribers at Most 257
10.3.3. Prohibition of Public Solicitation 258
10.3.4. Disqualification of the Issuer 258
10.3.5. Incompliant External Security 260
10.4. Issue Plan 263
10.4.1. Overview 263
10.4.2. Eligible Subscriber 263
10.4.3. Pricing Basis: The 20-Day Average Price 264
10.4.4. Shareholding Lock-up 255
10.4.5. Use of Proceeds 266
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Table of Contents
10.5. Disclosure in Private Placement 266
10.5.1. The Disclosure Roadmap in Private Placement 266
10.5.2. Disclosure by the Issuer 266
10.5.3. Disclosure by the Subscriber 269
10.5.4. Disclosure by the Diluted Shareholder 270
10.6. Private Placement to Designated Subscribers at Fixed Price 271
10.6.1. The Procedures Step by Step 271
10.6.2. The Deal VALIN STEEL’S (000932.SZ) 2007 ISSUE TO VALIN
GROUP & ARCELORMITTAL – Private Placement to SS
and Foreign Strategic Investor by SS-Controlled Issuer 282
10.6.3. The Deal HUAXIA BANK’S (600015.SH) 2008
ISSUE TO DEUTSCHE BANK ET AL – Private Placement
to Foreign Strategic Investor by Financial Issuer 282
10.7. Private Placement to Surviving Bidders through Price Bidding 284
10.7.1. The Procedures Step by Step 284
10.7.2. Complication of the Procedures when both Designated
Subscribers and Surviving Bidders Involved 289
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