Study Of Cross-shareholding Among Firms Regime

As a shortcut to expend firm's size, cross-shareholding among firms has become an effective way to address international challenges as China's accession to WTO; but, it would result in many negative consequences if it is widely used. The history of cross-shareholding among firms in China is still on the beginning, but its booming trend cannot be ignored. On the basis of their special circumstances, different countries adopt different legislative models to govern their cross-shareholdings'problems. Because the current firm law of the People's Republic of China is silent on problems of cross-shareholding among firms, this thesis aimed to discuss and analyse the regimes of cross-shareholding among firms in USA, Germany, Japan and China's Taiwan region and learn successful practices from other countries and regions for the purpose to improve the structure of corporate governance in cross-shareholding firms. Besides, it will also argue the establishment and improvement on the legal regime of cross-shareholding among firms which suits China's national situation. This thesis is structured as follows:In part one: the writer discusses the legal definition of cross-shareholding among firms, and its types; meanwhile, she illustrates the positive and negative effects of cross-shareholding among firms.In part two: it analyses the cross-shareholding among firms by comparing the legal regimes of cross-shareholding among firms, which are usually divided into two states of affairs in USA, Germany, Japan and China's Taiwan region, that is to say the cross-shareholding between parent and subsidiary companies and other cross-shareholding circumstances except aforesaid one. In this part, it identified the relationship between parent and subsidiary companies. Further, it compared the different legal regulations of relevant countries and regions, which will provide useful resources to establish an appropriate legal system of cross-shareholding among firms in China.In part three: it introduces the development of cross-shareholding among firms in China, and empirically analyses"Zhongguangxi"case concerned cross-shareholding among several companies. Through the analysis, the writer brings up the legislative proposals on the cross-shareholding among firms in China, namely, China should adopt separate legal regulations to govern the problems resulted from cross-shareholding among firms by reference to useful practical experience of other countries to distinguish the cross-shareholding circumstances between parent and subsidiary companies and other ones. Furthermore, it should improve the legal system, which means China should also improve the concerned regimes of supervisory board and independent directors, and make clear the legal consequences of illegal ownership of shares. Only through these reforms, China can construct and improve the legal system of cross-shareholding among firms.