On Benefit Protection Of Minority Stockholders In Share Repurchase

Share repurchase, refers to such an action that in order to shut down the capital or to adjust capital configuration, the public companies using the fund which root in amass their profit and hold by themselves repurchase their ordinary shares which have been issued, and make disposition of them as Treasury stock or to write off them. In west countries' well-rounded stock market, share repurchase is an ordinary way to deal with the companies' capitalization and it has done much good. Share repurchase can help public companies to improve their stock's inner invest value and then help to maximize the stockholder's benefit;and it can help restrain excessive stock jobbing;and it can help establish the employee hold system;and it is one of the most important means to protect the minority stockholders' benefit. But everything has two side, share repurchase has its side affection too. It may do harm to stock market. It may arise the risk the someone may use it to manipulate the market or to abuse some stable push, then the minority stockholders may suffer some loss. In share repurchase, the minority stockholders may suffer benefits loss because the inequity of information disclosure and the price of repurchase.This article analyzed the good affection and the bad affection that share repurchase may took to the minority stockholders, and have compared the legislation status of China, the United States, Germany, France, and Hong Kong, etc. on how to protect the minority stockholders' benefit, then the author bring forward his opinion on how to protect the minority stockholders' benefit.Firstly, we should regulate the information disclosure. The public companies should be asked to publicize all of the information relate to the share repurchase because those information is very important for minority stockholders, without those information they can hardly make decision properly. We must strengthen information disclosure to help the minority stockholders get enough information and prevent that someone could abuse the information.Secondly, to make a price is the core part of share repurchase, we should find a proper way on how to make the price to avoid the damage of the minority stockholders benefit. Generally speaking, the informal stock's price should based on the equity of perstock while the formal stock's price should based on the stock's current market price.Thirdly, we must help the minority stockholders to protect their benefit by themselves instead just protect their benefit only by means of lawsuit after the event. So, this article advises that we should establish a vote rule that all proposal which count for much with the minority stockholders' benefit should got a proper overpass rate among the minority stockholders.After that, we must take some other collocate means to protect the minority stockholders' benefit. For example, strengthen the custody on the directional share repurchase and make clear what kind of public company can do share repurchase and what kind of punishments they would take if they break the law on share repurchase.