According to lawyers involved in the first “low-value express” M&A and restructuring deal, the mechanism does not mean loosened regulation of such deals.
The proposed deal of Beijing TRS Information Technology to acquire Keyun Big Data was approved unconditionally by the China Securities Regulatory Commission (CSRC) on 18 October, and was the first such deal under the new review mechanism launched by the commission, with Tian Yuan Law Firm as the legal adviser of TRS.
Liu Yan, the leader of the project team and a partner at Tian Yuan, told China Business Law Journal that the process was hastened under the “low-value express” review mechanism, where pre-review and CSRC feedback were removed, and the company would proceed directly to the review and inquiry by the commission’s M&A and restructuring committee.
According to Liu, the project team needed to fully examine the legitimacy and compliance of the project and the process, conduct a simulation, and prepare for possible issues of concern that might arise from the committee in advance, to ensure the project got the go-ahead.
“Under the new review mechanism, some steps are simplified, which doesn’t mean loosened regulation of low-value transactions on the part of the CSRC, and IPO applicants and agencies should remain focused on the preparation of application materials,” said Liu.
“Now the IPO applicant and agencies need to take matters into their hands with respect to possible issues of regulatory concern in connection with the project, and are directly subject to the inquiry by members of the M&A and restructuring committee, which actually raises the bar for project quality and the professional competence of the agencies.”
TRS is China’s leading big data, AI and data service provider with proprietary core technologies, and Keyun focuses on big data technology as its core business.