Research On Legal Issues Of Regulation Of Foreign Investor's Merger And Acquisition Of Chinese Listing Companies

Since Isuzu Motors Corporation and Itochu Corporation jointly took the form of negotiated M&A of non-circulated stocks of Beilv Limited Corporation, which accounting for 25% of the company's total stocks, Foreign Investor's Merger and Acquisition of Chinese Listing Companies ("FIMACLC") has just a history of nearly ten years. FIMACLC is in its early stage of development, however, it plays a significant role in Chinese economy. FIMACLC helps to adjust and optimize domestic industry structure, to better stock structure in our securities market, and to improve on corporate governance and quality of listing companies, etc. FIMACLC becomes to be a hot topic among investors in securities market and investors begins to feel the charm of it. However, FIMACLC also has a negative influence on our economy. For example, the outcome of FIMACLC may cause monopoly of domestic market, to block the effective market competition, to evade our Mandatory rules in respect of market access and to threaten the development of our national industries, etc. Whereas, our government shall strengthen the regulation of FIMACLC according to law so that we can eliminate the negative influence of it. Based on the successful experience of legislation and jurisdiction in developed countries, the article analyzes particular legal issues regarding FIMACLC, and then produces some legislative proposals. The article is divided into three parts, is composed of four chapters, and the content of respective part is as follows: Part 1 is mainly the general introduction of FIMACLC including the concept, the characteristics, the function and the nature of it. And then the article notes that FIMACLC should cover four fields at least. One is on the acquisition of stocks in securities market, in which negotiated M&A of non-circulated stocks is the main form. The other three include these aspects such as anti-trust, market access and protection of state-owned assets and shares. Part 2 give a brief introduction of regulation of foreign investor's M&A of their domestic listing corporations in developed countries from the legislative and jurisdictional perspectives. After that, the article makes some comments on respective provisions of the mentioned countries. Part 3 focuses on the defects of the particular legal provisions of FIMACLC and propose some suggestion to perfect them. In the field of securities market, there are many bugs in partial tender offers, negotiated M&A and anti-takeovers. Base on reference for related rules of William Act and City Code Takeovers and Mergers, the article puts forward relevant legislative proposals. In the area of anti-trust, we nearly have no rules to regulate. So, after reference for specific rules of U.S. and Germany, the article tries to conceive a draft anti-trust legal system regarding FIMACLC. As to the market access policy, compared with related rules of U.S. and Korea, we have many imperfect rules, and the article give ways to resolve it. Finally, it is the field of protection of state-owned assets and shares. As for protection of state-owned share, the article is of the opinion that the most pivotal step should be the achievement of the circulation of state-owned shares. And when it comes to M&A of state-owned assets in listing companies, we should step out of misunderstanding of book value.