(Yicai Global) Sept. 7 -- Chinese companies that are listed on stock exchanges both at home and abroad will not be allowed to make their kindergarten assets public either directly or indirectly, according to a draft bill from the country’s Ministry of Education as it bids to prevent the exploitation of preschool education for profit.
Listed firms and their controlling shareholders may not invest in for-profit kindergartens through the capital markets nor purchase the assets of for-profit kindergartens by such means as issuing shares or paying cash, according to a post on the ministry’s website.
Fiscal funds, state-owned assets and collective assets should not be used to establish or support the establishment of for-profit private kindergartens or other preschool educational facilities and government-funded kindergartens should not be turned into private ones, it added.
Social capital will be banned from using mergers and acquisitions and other operations to control public kindergartens or non-profit private kindergartens.
Many listed companies run kindergartens, such as New York Stock Exchange-listed RYB Education and Bright Scholar Education Holdings, Shenzhen-listed Vtron Group, Shanghai-listed Shanghai Xinnanyang Only Education & Technology, as well as Hong Kong-listed Bojun Education and China Maple Leaf Educational Systems.
Offenders could be fined as much as CNY1 million (USD146,000), according to the draft bill.
The State Council previously issued a similar draft policy in November 2018. The re-release of the draft indicates that the country’s cabinet is seriously considering turning it into law. The draft bill did not go into details on how kindergarten assets already listed would be disposed.
Editor: Kim Taylor