A new law is being introduced to regulate management buy-outs or MBOs in state-owned enterprises to prevent state assets from being acquired illegally.

An MBO is the operation whereby the managers or executives of a company purchase controlling interest in that company.

Ji Xiaonan, president of Key State-Owned Enterprises Supervision Board under the State Assets Supervision and Administration Commission, said the regulations have already been drafted.

The move is in response to recent illegal property transfers and management acquisitions in large SOEs.

An official study shows during a buy-out, some enterprises have no auditing procedure for the departing management, and that some managers are even trading on their business performance for personal gain.

Experts say China's state-owned enterprise reform is entering a period of high risks and big opportunities. This stage will focus on the distribution of stock assets of the SOEs.

Source: CRI News