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COSCO promises to divest property holdings

COSCO promises to divest property holdings

Beijing: Chinese citizens are increasingly aggravated by state owned enterprises (SOEs) paying wildly over the odds for properties across the nation, stoking up the huge property bubble in the People's Republic.
Now Beijing is beginning to respond, demanding SOEs ease off their property acquisitions. Only one SOE has said it will follow Beijing's directive, COSCO. A COSCO Group subsidiary is the second largest shareholder in property giant Sino-Ocean, which last week paid the highest amount yet for another huge slice of the capital's real estate. COSCO ceo Capt Wei Jiafu has now said he will divest his firm's interest in Hong Kong-listed Sino-Ocean within six months. It still leaves China Life, another SOE, as the major shareholder.
The phenomenon of what has become known in China as "SOE land kings" has triggered controversy in the real estate market.
Among the top 10 properties with the highest land prices, eight were bought by SOEs. If ranked by land area, the SOEs also account for eight of the top 10.
On March 18, the authority overseeing state run entities released rules to ban SOEs whose major businesses are not property-related from entering the real estate market.
As the rule is currently being implemented, and if it goes smoothly, more than 70 State-owned enterprises will exit the real estate sector once their current development projects are complete. However, only COSCO's Capt Wei has publicly committed to adhere to this new ruling so far. [23/03/10]

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