Positive sign for stalled listings
Baosteel Group's planned overseas listing has not only boosted the share price of its subsidiary Baosteel Co Ltd, it has also given hope for the stalled plans of some State-owned groups in Shanghai.
A number of the city's large State-owned groups, such as retailer Bailian and hotel group Jin Jiang, were preparing for listings until late last October, when two top officials at the city's State-owned Assets Supervision and Administration Commission (SASAC) were detained for investigation.
Analysts expect a major breakthrough this year in the listing of some large, local State-owned groups. In fact, shares in some listed companies under these groups have been hotly pursued on the market.
Shanghai Port Group Co and Shanghai Automotive Group, two large State-owned groups in the city, both listed late last year and are considered success stories.
Shanghai Port, a major player in the city's international shipping center program, is seen as a role model by many large State-owned groups with listing plans.
Yang Guoxiong, the new chief of the SASAC, recently dismissed speculation about the stalled plans. He said the reform of State-owned assets would not stop because of a few cases. "Everything is progressing as planned," Yang was quoted by China Business News as saying.
For years, Shanghai has taken the lead in the reform of State-owned assets. Total State-owned assets in Shanghai are valued at 780 billion yuan, up 6 percent on 2005.
But the arrest of former Shanghai Party chief Chen Liangyu and the subsequent detention of SASAC chief Ling Baoheng and deputy chief Wu Meijiu has held up progress.
The two chiefs are believed to be associated with a number of problematic deals involving the city's State-owned assets.
The first was the restructuring of Shanghai Electric. Private firms were given preference over multinationals such as Siemens to take over some 6.1 billion yuan of State assets. An investigation found private businessman Zhang Rongkun had bribed many senior city officials to obtain lucrative deals and become the second-largest shareholder of Shanghai Electric.
(China Daily 02/28/2007 page15)
