Research On Normalizing Related Transactions Of The Chinese Listed Companies

Related transactions are lasting things in Chinese securities market, it is necessary to normalize the related transactions of listed companies in securities market. There are some positive actions of related transactions in essence, but when the securities is flooded with un-just related transactions which are tools to decorate financial reports, and transmit benefits from listed companies to main shareholders, related transactions have been receiving more and more sights from market and administration, more and more criticism, even minority shareholders are sick of related transactions. In fact, un-normalized related transactions infringe on benefits from minority shareholders, creditors and listed companies, and increase the risk of security investment, improve the possibility of speculation, add un-stable factors in market, and corrode the foundation of securities market. It is urgent to restrain the un-just related transactions. So the issue of normalizing related transactions in Chinese listed companies is occurred.This dissertation is composed of three chapters.Chapter 1 aims at the necessity of normalize related transactions. The chapter consists of four parts: Part 1 expounds the current situation of related transactions in Chinese listed companies, tells that the amount of related transactions in Chinese listed companies is excessive, and most of them are un-normalized related transactions which have disadvantages outweigh advantages; Part 2 discusses the types of un-just related transactions, points out two types of un-just related transactions. One is related transaction of inputting benefits, the other is related transaction of absorbing benefits. The former is tool, the latter is goal; Part 3 analyses the harm of un-just related transactions, points out that the harm is to the efficiency of disposing resources in securities market, the quality of information disclosure and the fairness of distributing benefits, challenges the principle of efficiency and fairness; Part 4 discusses the practical significance of normalizing related transactions. According to the modern theory of corporation, just related transactions play a part in reducing the expenses of transaction and raising the efficiency of transactions. So the reasonable method is normalizing instead of prohibiting related transactions. It is necessary to restrain un-justrelated transactions, encourage just related transactions, and make related transactions produce positive effect.In chapter 2, the author analyses how to normalize related transaction according to"open, impartiality and fairness" principles. The chapter consists of four parts. In part 1,the author believes that the defect of capital democracy (reflect impartiality principle) isthe root of un-just related transactions. The capital democracy which is based on "oneshare has one vote" and majority decision has un-replaced positive effect as well aspolitical democracy, reflects the principle of impartiality, meanwhile, it has defects.Capital democracy belongs to "un-perfect procedure justice" which was discussed in Atheory of Justice (John Rawls). Capital democracy can't produce perfect substantivejustice. The appearance that majority encroach on minority's benefits will be occurredwhen capital democracy isn't restricted, which are reflected by un-just relatedtransactions. As well as political democracy needs constitutionalism, the un-just relatedtransactions which owe to capital democracy needs the systems of informationdisclosure and restricting to shareholders' power, to supervise majority and protectminority, to reach reasonable justice; Part 2 discusses that the system of informationdisclosure (reflect open principle).supervises the capital democracy to normalizerelated transactions Open principle can partly supervise the capital democracy, plays anun-replaced role in normalizing related transactions, but it hasn't perfect efficiency, andneeds fairness principle; Part 3 discusses that the s...