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China banks poised to go on sale
(AP)
Updated: 2005-10-20 07:15
"For us, the most important change will be the transition from a government
structure to a completely commercialized operation ... the operating mechanism
will become more transparent after the IPO. That will be beneficial to our
clients," he said.
U.S. Securities and Exchange Commission Chairman Christopher Cox created a
stir earlier this week when he told a Hong Kong newspaper that CCB didn't list
on the New York Stock Exchange because "it couldn't meet the NYSE regulatory
requirements."
According to the interview with the South China Morning Post on Monday, Cox
expressed concerns about the bank's balance sheet, its management and the
quality of its loans.
CCB spokesman Chai Xiang on Wednesday called Cox's statements "inappropriate
and extremely irresponsible." The bank said in a statement has been audited by
outsiders and its financial reports met international accounting standards — but
did not directly address Cox's contention that it couldn't meet NYSE listing
standards.
A spokesman for the New York Stock Exchange declined to comment on the
matter, saying it was the Big Board's policy not to comment on companies not
listed on the exchange.
China's regulators have successfully encouraged foreign banks to take
strategic stakes in CCB and other banks as China prepares to fully open its
banking sector to foreign competition by the end of 2006, according to the terms
of its entry to the World Trade Organization in 2001. However, authorities have
capped total foreign holdings in any single bank at 25 percent to ensure the
state keeps control.
Bank of America has invested $2.5 billion in CCB and will spend another $500
million to keep its stake at 9 percent.
The billions of dollars raised through overseas share offerings are crucial,
but analysts say the banks' exposure to outside investors and international
standards for accounting, management and financial disclosure may be even more
important.
"Regulators can't regulate the banking sector by themselves," Green says.
"They need the market."
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