Midea, established in 1968 in southern China, planned to issue new shares to Goldman Sachs in a private placement, and the New York-based bank would have the right to appoint one director to the board, Shanghai Securities News reported, citing sources.

Midea's Shenzhen-listed shares were suspended from trade from Tuesday pending an announcement related to "important business matters" after they closed at 12.79 yuan (US$1.63) on Monday.

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Goldman's attempt to buy into Midea comes after the bank bought a $113 million stake in China's biggest auto glass maker Fuyao Glass, Fuyao said on Monday.

Midea plans to sell its stake to Goldman at a price of 9.09 yuan a share "at least", the newspaper said, citing sources, but the report did not say how many shares Goldman would take.

Midea, a private company in China where state-owned enterprises still make up a major part of the economy, makes a range of home appliances from refrigerators to electronic fans.

Currently, Midea is controlled by its founder, He Xiangjian, a private Chinese businessman with a 46.4 percent stake, which made him the top shareholder before shares were suspended.

"But Goldman will send a representative to Midea as a board director to participate in the company's management," the source added.

Beijing said this year it would let foreign investors take "strategic stakes" in listed firms by buying their freely-floated A shares for the first time, a new channel apart from the existing Qualified Foreign Institutional Investor scheme that aims to lure more foreign cash.

The newspaper said Goldman would buy the shares of Midea under the new rule for its "strategic stakes", which would have an investment lock-up period for three years at least.

A Goldman spokesman in Hong Kong could not immediately be reached for comment on Thursday morning.