外文翻译----在中国并购交易中的风险管理(编辑修改稿)

外文翻译----在中国并购交易中的风险管理(编辑修改稿)内容摘要：

mployment, legacy problems, and environmental issues. Tax due diligence should be an integral part of any buyer39。 s assessment of a Chinese pany. Failure to capture irregular or illegal tax practices and quantify the associated hidden liabilities and downside risks could lead to serious problems. In addition to overstated financial projections and an inflated purchase price, latent problems in this area may result in future tax audits, assessments for pastdue taxes, and hefty penalties. Despite the severe civil penalties and the possibility of criminal prosecution, it is not unmon to discover tax evasion, aggressive and irregular accounting and tax practices, and even tax fraud in a Chinese pany. Some Chinese panies keep two or more sets of books in order to understate tax exposure. Relatedparty transactions are monplace and sometimes are based on handshakes and oral arrangements, with the result that the transactions are neither documented nor reflected in the pany39。 s books. Through these transactions, profits may be shifted to domestic entities that are in a loss position or to offshore entities such as those in Hong Kong. If it is determined that a transaction has violated PRC transferpricing laws, the pany may have to pay back taxes and penalties. Buyers should also keep in mind another important aspect of Chinese tax law— there is generally no statute of limitations for tax liabilities. Awareness of this circumstance may be particularly important when allocating tax exposures and entering into related indemnification or other arrangements. Employment issues frequently arise when the target is a stateowned enterprise with significant labor redundancy. Major layoffs might trigger worker protests and other social unrest, thereby politicizing the transaction and attracting unwanted attention from the local government authorities. Another frequently encountered issue is how much of the workforce the target pany may reduce after the acquisition. This is often a heavily negotiated issue, and the seller may even bring it up again at the last minute, hoping the buyer will promise. Given the political plications of employment matters, it would be prudent for the buyer to take a firm stand about its position, negotiate relentlessly upfront, and resist the temptation to leave this issue behind for future friendly discussion. Once the deal is otherwise cut, discussions on cutting back the workforce are likely to be neither pleasant nor friendly. Finally, one of the most difficult headaches for potential buyers of Chinese panies is the legacy issue inherited from former stateowned enterprises or created during the reform and restructuring (., privatization) process. Buyers of privately owned panies that were restructured or converted from former stateowned enterprises should be alert to possible violations and liabilities associated with the prior restructurings or management buyouts. A normal duediligence investigation frequently will not reveal much in terms of such legacy problems, because any problematic elements of the pany39。 s history are likely to be kept secret until a corruption scandal erupts— usually when a local official loses his job or gets investigated. In such cases, it frequently turns out that the seller does not have clean hands. To understand the pany and assess the risks, the buyer should fully engage its local teams (including private investigators, if needed) to gather local intelligence and sniff out hidden issues to the greatest extent possible. If the shadow of doubt cannot be eliminated, then it may be necessary to consider alternative courses of action. Purchase Price and Closing Matters To deal with uncertainties over valuation and mitigate the risks associated with the acquired pany, acquirers should carefully craft a purchase agreement with an acceptable payment arrangement (for the purchase price) that is workable under PRC law. Unlike Mamp。 A transactions in the ., the options of escrow accounts and holdbacks in China are quite limited and unsatisfactory due to regulatory constraints and an underdeveloped bankingservices market. PRC law requires a foreign investor to make payment within three months of the issuance of the new business license of the acquired target. The deadline may be extended, subject to government approval, but no less than 60 percent of the payment must be made within six months of the issuance of the new business license, and the balan。