The central government is planning new rules to regulate the sale of state-owned stakes in listed companies in a move to prevent assets from being sold too cheaply, sources said.
The rules would require sellers to factor in share prices into valuation instead of the current practice in which only net asset value was considered, a source said.
'It makes more sense to consider both the asset value and trading price to avoid the loss of state assets,' said Guo Tianyong, a professor with the Central University of Finance and Economics.
'It's a way for the central government to protect and even increase the value of state assets.'
Many state-owned firms have been criticised for selling their stakes in listed companies cheaply by basing the price on net asset value, which is usually at a deep discount to the market price especially when the mainland's stock markets more than doubled last year.
The sales of state-owned lenders such as Bank of China and Industrial and Commercial Bank of China to foreign investors, for example, were criticised by academics who claimed that the rise in share prices after the banks' initial public offerings reflected that the deals were undervalued.
The bullish markets and the increasing number of listed state-owned firms also prompted the regulators to come up with new measures to reap higher returns from selling state stakes.
