Research On Protection Of Minority Shareholders In Taking Over List Company

Take over is that a company can gain the controlling power of the other company through buying capital stock of the company in brief. In the process of take over, the target shareholders, especially minority shareholders, are situated in disadvantageous positions. Lacking transaction information and negotiation power, their rights and interests are liable to be infringed by both the bidders and the board of directors of the target corporation. Therefore, related legislation is urgently needed to regulate take over. A majority of countries strictly regulate take over via legislation, administration and judiciary means, trying to provide take over with a wider range of objects, adequate information, a legally fixed minimum period, a standardized procedure and a reduction in its coercion. In view of the achievements other countries have made in the take over regulation, the dissertation mainly studies the regulation of the practices of controlling shareholders and the bidder and the board of directors of the target corporation, aiming at protecting the target shareholders, especially minority shareholders, and bringing forward suggestions for the perfection of the legal system of the take over in China.The thesis consists of six chapters, and it is organized as follows:Chapter 1: This part discuss the status of other countries in take over, aiming at protecting minority shareholders. This part tried to discuss importance of protecting minority shareholders and find some experience and instruction for Chinese legislators.Chapter 2: Including the basic theory of the protection of the minority shareholders.Chapter 3: It is common that controlling shareholders have controlling power to damage the profit of the investors. Therefore, controlling shareholders have controlling power to damage the profit of the investors. Therefore, controlling shareholders will bear more duties than minority shareholders.Chapter 4: This part inquires the practices of regulating the responding action of the board of directors of the target corporation, that points out that the mainstay opinion opposes willful defensive measures employed by the board of directors of the target corporation. As to the problem of the power concerning deciding whether defensive measures should be taken, the author holds that according to the corporate governance status in China and the stipulated powers of the board, and considering thefact that the benefits of the shareholders and the directors of the board are in fierce conflict, the board of directors of the target corporation does not and shall not have the decision-making power in deciding the adoption of defensive measures. On the contrary, such decision shall be made by the general meeting of shareholders, and shall be free of coercion or preclusion, and in full conformity with proportionality test. Of course, in handling the take over, the board of directors of the target corporation shall be obliged to provide the shareholders with the its stance and suggestions and disclose these information, as well as be entitled to design non-coercive or non-preclusive defensive measure for the general meeting of shareholders for reference.Chapter 5: As a "crossing point " of information disclosure system and regulation about take over, the importance of "The information disclosure system of take over" speaks for itself. Before this system is established, some kinds of illegal behaviors happened frequently in the processes of take over, such as conjunction dealing, act in concert, insider dealing and misrepresentation. In order to prevent this kinds of behaviors, different country strengthens its legislation and tightens the disclosure obligations of the bidders. These methods make the activities of merger and acquisition under the "sunlight" and prevent "black-box manipulations" effectively. Comparing the regulation of different countries, I found some differences and arguments. This part tried to discuss some of them and find some experience and instruction for Chinese legislators.Chapter 6: canvasses the civil liability of misrepresentation. There are three selections in establishing civil liability in this field. The first is the "contractual release" pattern, the second is the "tort release" pattern, the last is the "regulation release" pattern. Different pattern has advantages and disadvantages, while the last pattern is concluded to be the most feasible one.