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Comment: New rules in China restrict funding for certain M&A deals, leading to risk of disputes between buyers, sellers

By MLex Staff ( March 29, 2018, 08:52 GMT | Comment) -- New asset management rules in China that prohibit financial institutions from providing services to other financial institutions to enable them to skirt restrictions on the scope of their investments or leverage levels are having an unexpected effect for certain merging parties. They are derailing a number of share purchase agreements reached before the new rules were formulated, and could well mean the parties to these transactions will seek arbitration, or even lawsuits, in the future to resolve their funding impasse.New asset management rules in China that prohibit financial institutions from providing services to other financial institutions to enable them to skirt restrictions on the scope of their investments or leverage levels are having an unexpected effect for certain merging parties. They are derailing a number of share purchase agreements, or SPAs, reached before the new rules were formulated, and could well mean the parties to these transactions will seek arbitration, or even lawsuits, in the future to resolve their funding impasse....

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