As a result of a recent meeting held to draw up the Joint Venture Industry Law (
But that was the only solid proposal that came out of the meeting. Other articles remain and will be discussed in the future.
Analysts said that until a new minister of finance takes office next month, there is unlikely to be any significant breakthrough in the drafting of the law.
The finance ministry held a meeting with representatives from joint venture industry on Saturday to discuss a draft law proposed by the Joint Venture Association (創投公會).
But after five hours, ministry officials had many unanswered questions regarding much of the draft's content, and therefore it has been left for future discussion.
The only consensus was that finance ministry would be responsible for regulating the industry.
In Article 20 of the draft, the Joint Venture Association proposed that any joint venture firm would not be permitted to take deposits from employees or any other person.
In addition, any funds joint ventures receive from outside groups for short-term use would not be able to exceed 20 percent of the company's capitalization.
But ministry officials did not agree with this proposal. Their idea is to allow joint ventures to accept funds only for long-term use.
As to short-term uses, a draft law proposed by the ministry of finance makes no mention of how this should be regulated.
Also in the finance ministry's draft law is a provision that allows joint venture companies to raise funds from four kinds of sources. The sources include domestic and foreign industrial banks and commercial banks; domestic and foreign companies; domestic and foreign securities companies; and domestic and foreign public or private funds.
The finance ministry will support joint venture companies in their efforts to raise funds from these four kinds of sources.
As to rules pertaining to how much can be raised from the four types of sources, the finance ministry has yet to propose regulations.
The Venture Capital Association did not oppose such a clause.
Analysts said that besides the major differences between the draft laws put forth by the finance ministry and the Joint Venture Association, one major obstacle blocking a consensus is the transfer of power next month.
Therefore, until a new finance minister arrives, the two sides are unlikely to find any common ground.
Industry executives are reluctant to make any deals with the present administration, as they fear
those decisions could be overturned by the incoming administration.
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