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Shanghai stock exchange cracks down on share-backed loans by controlling stakeholders

2018-05-18 09:57 | www.trend.az | 3

The Shanghai stock exchange is cracking down on shareholders with controlling stakes in companies who pledge a high percentage of their holdings as collateral for financing, the China Securities Journal said on Friday, without citing sources, Reuters reports.

The practice has prompted regulatory concern that a sharp fall in share prices could lead to a sudden change in the controlling shareholders of firms, which could consequently destabilize the market.

The newspaper said the Shanghai Stock Exchange (SSE) has asked controlling shareholders to disclose the share-backed loans they’ve taken out and to take measures to avoid a credit crisis.

In some cases, they have assisted investors in share disposals in “a safe way”.

The controlling shareholders of around 150 firms have pledged over 80 percent of their shares, the paper said.

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