Revealed: China corporate records policy shift to harm hedge fund and PE access

The new policy was introduced by Administrations of Industry and
Commerce (AICs) in Shandong and Tianjin provinces as well as
parts of Shanghai earlier this year, and was rolled out in
Beijing in May. It prevents deal counsel from independently
examining and copying the content of a company’s AIC files
– a major source of legal material in the due diligence
process.

It remains possible, however, to search certain basic corporate
information (such as business address, registered capital and
business scope) on the AIC website. But only with a proof of
claim to the court or the target company’s written
permission, in accordance with the

Officially, the move aims to better regulate the use of company
information. Previously domestic lawyers, the police and
China’s national security bureau, among others, could
undertake company AIC searches. But some smaller firms and sole
practitioners had begun misusing this privilege by passing
information along to unauthorised foreign and local parties for
a fee.