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So, there is a chance that more delays are to be expected in the transfer of the funds. The chinese regulator will have to be asked to examine the underlying transaction of the requested transfer, in order to verify its authenticity and compliance with relevant regulations.
If this is the case, I think it´s time for PVR´s management to clarify the issue, instead of setting new backstop dates that are impossible to be met.
Regards
Fernan
The money transfer should be approved in the end, since the underlying transaction is a foreign investment by a state-owned company, in a project that has been previously approved by the chinese government.
But I think we can´t rule out additional delays in the process of having the remittance approved by both the bank and SAFE (State Administration of Foreign Exchange).
Regards
Fernan
Hi Urraca
I think Phoebus is right. They asked the bank to transfer the money just after the climate change bill was rejected by the government.
Now they are in the process of having the bank (and the government) reviewing the legality of the transactions that underlines the transfer to be made. It´s clear that is not going to be an automatic approval by the bank and the chinese authorities. It could take time
Regards
Fernan
Good find Fernan. So there are considerable procedural difficulties in getting money out of China, and then further procedural hurdles in depositing the funds into the EU. Which could explain the repeated delays over the last few weeks. PVR repeatedly setting backstops and then allowing them to be broken has nit been helpful though.
Apart from tightening supervision on outbound investments, it is reported that measures have been taken to control outbound payments:
1.Banks are now required to report any overseas transfer of US$5m or more under any capital account item (covering both foreign currency and RMB) per transaction to Beijing SAFE. Such overseas transfers can only be made after the Chinese regulators have re-examined the underlying transaction of the requested transfer to verify its authenticity and compliance with relevant regulations.
2.SAFE also tightened controls over ODI with a capital outflow of US$50m or more. Such fund transfers will only be made after re-examination of the underlying transaction for authenticity and compliance with relevant regulations.
3.The rules for cross-border RMB lending by Chinese companies (which used to be more relaxed than the regime for cross-border lending in foreign currency) has also been modified by the PBOC recently. The cross-border lending limit (which is below 30% of the lender’s total equity) and shareholding requirement (that the lender and the borrower must have a shareholding relationship) which previously applied only to foreign currency lending now also applies to cross-border RMB lending. In addition, the rules now make it clear that such cross-border RMB lending by Chinese companies need to be registered with SAFE.
http://www.allenovery.com/publications/en-gb/Pages/Chinas-new-restrictions-on-outbound-investments-and-remittance.aspx