Legal Institutions Of Protecting The Minor Stockholders' Interests In The Listed Companies

Purpose:The amount of shares held by minor stockholders multiples and grows into a vital force to secure the prosperity and steadiness of the securities market. However, those minor stockholders' interests are subject to constant infringements. This paper tries to offer a legal solution to this pressing issue.Method:This paper introduces the concept of optional parallel coupling from systematology to establish a theoretical mode for the preservation of the minor stockholders' rights and interests and then uses this concept to analyze the current problems. Structure:Chapter One outlines the basic rules of the legal institution of protecting the minor stockholders' interests. In Chapter Two, those rules are applied to explore the reasons why minor stockholders seem so helpless facing various attacks. And Chapter Three gives some advice to minor stockholders on how to protect themselves from the abuse of the major stockholders' predominance. Chapter Four and Five study respectively on the improvement of relevant supervising authorities' measures of protecting the minor stockholders and the precaution function of stock exchange market and intermediary organizations. Last but not the least, Chapter Six discusses the introduction of foreign institutions into China's judicial remedies.Contents:As a theoretical instrument of systematology, optional parallel coupling, which utilizes elements of low reliability to design a system of high reliability, applies not only to biological technology but also to social processes, especially economic processes.Inside some systems requiring high reliability, parallel coupling is used to set up a redundancy system that includes a series of parallel elements (suppose there are n elements). In case that an element runs smoothly, the other n-1 elements are, to some extent, in reserve or redundancy. Only when all the parts of the system fail does the whole system break down. In other words, the system shall not go wrong as long as at least one of the elements operates properly. This is the essence of option parallel coupling.This paper attempts to take advantage of the theory of parallel coupling to analyze the interactive relationship of companies, stockholders, supervising authorities, stock exchange market, intermediary organizations and judicial system in order to set up an efficient, just and strict legal institution to protect minor stockholders, which by enacting individual legislations adjusts the companies and major stockholders' behaviors and puts them under the supervision of minor stockholders, supervising authorities, intermediary organizations and courts. Furthermore, these individual legislations shall make up a multi-fold preservation system by means of optional parallel coupling.Minor stockholders suffer from various invasions in that:1. Companies are under the control of major stockholders.2. Minor stockholders are overwhelmed by major stockholders.3. Stock exchange market and intermediary organizations fail to precaution against potential dangers.4. Insufficient judicial remedies.Although up to date China employs different means to protect minor stockholders and creates a rather complete legal system in the securities market, those measures are far from satisfactory. In some sense, some deficiencies existing in those measures undermine and even offset their strengths. For instance, the major stockholders' monopoly over the company's management destroys the balance and supplementary relations between stockholders' meeting, board of directors and supervisors and convert their parallel coupling relationship into series connections, which incurs the abatement of the reliability of the company's management and the frequent occurrences of the invasions against minor stockholders. For example, if the disclosed information is false, stockholders cannot claim for their compensations promptly and the supervising authorities will fail to investigate into the misconducts.The rapid development of Chinese securities market urges...