SSE to Increase Scrutiny of M&A Risk

Shanghai Stock Exchange plans to increase its scrutiny of mergers, acquisitions, transfer of control deals and other corporate actions that could lead to financial risk in the market, Reuters quoted the official Xinhua news agency as reporting on Saturday. SSE said in a press briefing on Friday it plans to focus on ensuring a stable market and risk prevention. SSE wants to prevent a small number of companies from becoming a platform for financial chaos, the agency said. The exchange plans to prevent companies from concealing the “true purpose” of deals as was done in some recent long-term agreements and equity pledges that were designed to transfer ownership, Xinhua reported, citing an unnamed SSE official. Overseas deals by Chinese companies fell by almost 50% in the first half of this year, a result of capital controls and increasing bank scrutiny.