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A Facebook staff uses a Gear VR virtual reality headset by Oculus and Samsung Electronics at thenew Facebook Innovation Hub during a preview media tour in Berlin, Germany, February 24, 2016.
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The China Securities Regulatory Commission (CSRC) has banned listed companies fromcross-investing in or acquiring companies in four industries: internet finance, gaming, movieand television, and virtual reality with money raised via additional stock issuing or other ways,the online financial magazine Caixin reported on Wednesday citing a source familiar with thematter.
The CSRC hopes that by taking this measure money in the capital market will flow into thereal economy industries as much as possible. For example, it's acceptable for a cemententerprise to invest in photovoltaic industry, however, such a company would not be allowedto invest in gaming, the source said.
"A listed company is creating a bubble in the disguise of mergers and acquisitions. If acompany is not performing well in its core business, it starts investing in some unrelatedvirtual industries and this will eventually harm the interests of investors," the source added.
In March, the CSRC tightened the cross-industry transactions and did some "specialinspections", however, the commission did not place a ban on mergers and restructuring ofthose industries, a person at an investment bank also told the newspaper.
There are bubbles in the four above-mentioned industries, and it's difficult to assess theirvaluations, the source added.
