Newsletter
DISCLOSURE OF MANAGERS' AND DIRECTORS' INVOLVEMENT IN PRC BUSINESSES
To ensure transparency and to protect investors' interests, on 18 July 2006 the Financial Super-visory Commission ordered that if a manager of a public company engages in the same type of business activities for himself or others, or a di-rector of the company undertakes actions within the scope of the company's business activities on his own or another's behalf, such activities shall require the permission of a board meeting or shareholders' meeting; and if such activities form part of the business operations of a PRC enter-prise, the company must disclose information about such activities in accordance with the Se-curities and Exchange Act:
Time and manner of disclosure:
1.Within two days following the date of a resolution by a board meeting or share-holders' meeting granting permission for a manager or director to engage in such ac-tivities, a public company should enter in-formation about the resolution and the major content of such activities into the Market Observation Post System (MOPS).
2.If a public company becomes aware that a manager or director of the company is un-dertaking such activities without having duly obtained permission by resolution of a board meeting or shareholders' meeting, it must within two days after receiving such information enter into the MOPS details of the major content of the manager's or di-rector's activities, and of the measures the company intends to take in response.
The "major content" of such activities should include at least the name of the manager or director, the position held with the PRC en-terprise, the name, address, and business ac-tivities of the PRC enterprise, and the degree of impact on the finances and business of the disclosing company. If the manager or di-rector concerned has invested in the PRC en-terprise, the company should also disclose the amount of the investment and the sharehold-ing.