Administrative departments at all levels, enterprises and institutions, supply and marketing cooperatives and other cooperative economic organizations, rural cooperative foundations and other foundations shall not engage in financial business such as deposits and loans. Enterprises shall not handle lending or disguised lending financing business in violation of state regulations. Loans between state-owned enterprises need to be recorded in the loan agreement. State-owned enterprises can lend funds to another enterprise by borrowing funds. Under the premise of not violating the relevant laws and regulations, the approved state-owned enterprises can borrow funds and charge the same capital cost as the financial enterprises in the same period, and the income is included in the financial expenses (negative), and the borrowing enterprises are included in the financing and lending subjects to pay the financial expenses. At present, enterprises with different ownership systems are not allowed to engage in financial products business, and there can be no acts that cause the loss of state-owned assets and the transfer of benefits.

Investment and financing decision-making of enterprises should strictly abide by relevant laws and regulations, follow scientific and democratic decision-making procedures, standardize feasibility studies and implement accountability system. Investment and financing decisions should adhere to the principle of prudence and fully predict investment risks. In the feasibility study, the existence of uncertain factors should be judged negatively, and projects with significant uncertain factors should not be implemented in principle. The enterprise shall timely report to the board of supervisors the important information about business management, reform and development trends and matters of concern to investors. The scope, content, submission form and time limit of an important report of an enterprise shall be determined through consultation between the enterprise and the board of supervisors.

Under what circumstances is it illegal for state-owned enterprises to borrow money from abroad?

1. Obtain credit funds from financial institutions and lend them to borrowers at high interest rates, and the borrowers know or should know in advance;

2. Borrowing money from other enterprises or raising funds from employees of the unit is lent to the borrower for profit, and the borrower knows or should know in advance;

3. The lender knows or should know in advance that the borrower is still providing loans for illegal and criminal activities;

4. One party enters into a contract by means of fraud or coercion, which harms the national interests.

Legal basis:

Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases

Article 11 The people's court shall support the non-governmental loan contract concluded between legal persons or other organizations for the needs of production and operation, except under the circumstances stipulated in Article 52 of the Contract Law and Article 14 of these Provisions, if the parties claim that the non-governmental loan contract is valid.