Judicial Perspective Of Unfair Related Party Transaction Among Listed Corporations

"Related party transaction"(RPT) means a transaction in which resource or liabilities are transferred between related parties, weather or not it involves any consideration. A RPT may have many positive effects to company business, while it also produce some negative impacts, such as breaching the law of fair competition, transferring capital and profits between related parties, and thereby impair the interests of the company and shareholders. In China, unfair RPTs widely exist among the business activities of listed companies, and the negative effects they have should not be disregarded. Considering overseas regulatory experience and combinating with our nation's practice, this report put forward some relevant policies and suggestions that, first, a legal system be established to regulate the manners of holding shareholders; second, RPTs proposed by companies in the process of seeking a listing be more strictly supervised; third, the internal control system for RPTs by listed companies be established and improved; fourth, the view and oversight of the practices conducted by the professional intermediaries be enhanced; fifth, the listing rules set out by the securities bourses be consummated, and so on.