China regulator condemns 'barbaric' stake acquisition

China's top securities regulator has condemned some asset managers for their "barbaric" leveraged buy-outs by using illegal funds after some of the recent incidents of high-profile acquisitions were reported in the country.
"You have been barbarians and ultimately become robbers in the industry, and that is unacceptable," Liu Shiyu, chairman of the China Securities Regulatory Commission, said yesterday during a meeting of the Asset Management Association of China, a self-regulatory body that oversees private funds.
Any attempt to acquire a majority stake in a listed firm using funds from questionable sources is crossing the line, Liu was quoted as saying by state-run Xinhua news agency.

Acquisition backed by insurance funds will inevitably affect the target company's share price, and could threaten the corporate governance structure, he said.
"Funneling public funds into leveraged acquisition means ordinary investors will ultimately bear the risks, underscoring this is absolutely not financial innovation," he said.
His criticism is seen as partly alluding to recent instances of high-profile A-shares acquisitions, including a bid by property developer China Evergrande Group to acquire 14.07 per cent shares of its peer China Vanke Co. Ltd. With 36.27 billion yuan (USD 5.26 billion), the report said.