On 20 March 2014, the Ministry of Commerce of the People’s Republic of China (“MOFCOM”) issued a notice announcing that it will make public decisions sanctioning companies failing to notify mergers that meet the filing thresholds. The notice further provides a fax number allowing whistle-blowers to report transactions allegedly infringing Chinese merger control rules.
This notice increases the pressure on companies to file their transactions in China, as it adds the risk of “name and shame” to the existing fining and unwinding sanctions. The whistleblower hotline however raises risks of misuse by companies to harm competitors.
Publication of sanction decisions against companies failing to notify transactions -
So far, MOFCOM usually does not disclose such information and sanctioned companies may keep potential fines confidential. The avoidance of bad publicity is particularly welcomed by public companies who can thereby limit the impact on their stock price.
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Topics: Competition, Filing Requirements, Mergers, MOFCOM, Public Disclosure, Sanctions, Whistleblowers
Published In: Antitrust & Trade Regulation Updates, General Business Updates, International Trade Updates, Mergers & Acquisitions Updates
DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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