Bank of China and China Construction Bank face legal barriers in their overseas listings due to the unclear role of their state parent, the China Securities Journal said on Monday, citing a government source. The banking regulator had asked the Big Four state banks, including those two, to list by 2007, the newspaper said, giving a firmer government timetable than previously disclosed.
"There are still legal obstacles in overseas listings of Bank of China and China Construction Bank due to the status of the Central Huijin Investment Co," the newspaper quoted an unnamed senior official at a government agency as saying.
Central Huijin, set up at the end of 2003 to oversee a $45 billion capital injection split by Bank of China and Construction Bank, had yet to determine whether it was a company or a government agency, the official was quoted as saying.
Overseas regulators would grant one listing licence to the two banks as they were owned by the same parent if Huijin was classified as a company under foreign rules, the official said.
"If Central Huijin is determined as a government agency, the problem of the listing licence will be resolved, but it would be against the original intention of the reforms," said the official, who did not elaborate.
The planned share sale is supposed to free the banks from government management, not confirm it.
The newspaper did not say which overseas jurisdictions presented the legal obstacle.