ASEAN KEY DESTINATIONS
Shares made during private offerings would not be allowed to transfer for at least one year and a private offering must be done at least six month after the first private offering, according to the draft. These measures are to prevent the over-dilution of shares to ensure capital effectiveness and to improve issuer's responsibilities.
Private offerings raise funds from a small group of investors (about 100) without public disclosure and are generally conducted under exemptions allowed by the State Securities Commission.
Private offerings are facilitated by both public and non-public companies. Regulations that govern these issuers are different and based on the Enterprises Law and the Securities Law. The draft proposal aims to prevent non-public companies from making private offerings before making an initial IPO.
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