Legal Study On The Connected Transaction Of The Listed Company

In the process of the development of the market economy, many companies have obtained the qualification to list on the stock market, accompanying with the shareholder's restructuring. The listed company and their interested person inevitably conduct many connected transaction in the process of the assets reorganization and the business contacts. The legal connected transaction can optimize the equity structure, save the cost of transaction and improve the capacity of resisting risk of the listed company. However, in reality, with the effect of many reasons and the disadvantages of the human nature, the connected transaction has become the tool with which the listed company and the interested person obtain private profits. On the basis of analyzing the cause of connected transaction, this thesis mainly comments the listed company's connected transaction in the process of the assets reorganization and the business contacts and further put forward the law regulation and relief measure of the connected transaction in order to regulate connected transaction better. There are four chapters in this thesis. The first chapter is about the meaning of the connected transaction. Connected transaction refers to any transaction conducted by the company, the affiliated company of the listed and their interested person. The connected transaction of the listed company means any transaction conducted by the listed company, the affiliated company and their interested person. In the process of the financial affairs and operating decision, if one party is capable of controlling the other party directly, indirectly or commonly or exercising great influence on the other party or two parties or more parties are controlled by a single one, they are deemed as an interested person one another. The interested person refers to a kind of objected state, any person with the capacity of controlling or exercising great influence can be deemed as the interested person. The essential character of the connected transaction lies in the two sides, it can benefit for the development of the listed company, at the same time, it also have the negative effect, such us infringement upon interests of the shareholder, destroying the credit system of the stock market. In the last part of this chapter, the author introduces some issues on the connected transaction of the list company in the practical legal affairs, including the litigation and the effectiveness decision. The second chapter discusses the content and the expressing forms of the connected transaction. The content of connected transaction is what the assets and the right and interest points to, including the tangible assets, shareholder's right, creditor's right, profiting opportunity, intangible assets and comprehensive service. The connected transaction of the listed company is mainly manifested in the assets reorganization and the business contact. The former includes reverse merger, borrowing shell to the market,trust operation and share repurchase. The first two of them are the traditional way in the process of the restructure of state-owned enterprise. With the utilized shell resources is becoming smaller and smaller, the new forms appear including the trust operation and share repurchase. The trust operation refers to the act that the enterprise (the interested person of the listed company) trust it's assets, shareholder's right and interest or the whole enterprise to the listed company to operate and administrate, the latter return them upon the expiration of the trust. The share repurchase is the internal act that the listed company exercise the share shrink. The connected transaction in the business contact mainly include connected buying and selling, connected guarantee, capital occupation, capital lease and the transformation of cost burden. The affiliated buying and selling is often based on the internal price and affects the other shareholder's interest. On the other hand, in the process of the affiliated buying and selling, the holding shareholder often appropriate the listed c...