Ernst & Young says China needs to reassess foreign takeover rules - report |
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Wed, 14 Feb 2007 02:09
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BEIJING (XFN-ASIA) - Ernst & Youn said China may need to reassess recently introduced rules on foreign takeovers of local companies amid signs of a slowdown in venture capital deals due to regulatory uncertainty, the Financial Times reported.Bob Partridge, head of Ernst & Young's Chinese venture capital advisory group, told the newspaper that a sharp drop in Chinese deals in the fourth quarter of 2006 reflected frustration among foreign groups seeking to invest in early-stage companies.'When the government rolls out new rules, they have the right intentions but the wrong details,' he was quoted as saying.'Venture capital is not top-of-mind among regulators, but if they see the negative impact they will change the rules,' he added.The regulations, which came into effect last September, require prospective investors to seek approval of planned deals from China's Ministry of Commerce, which has to gauge their likely impact on 'national economic security'.So far, no approval has been given.virginie.mangin@xinhuafinance.com
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