The Study On The Legal Problems Of The Small And Medium-sized Shareholder' Rights And Interests In Foreign M&A

Foreign M&A is one of the major styles of the utilization of foreign capital in China.In the current practice of foreign M&A,more and more foreign investors aim at the control of the Chinese enterprises and Chinese enterprises are integrated into the part of the objectives of its global strategy.The process of foreign M&A actually reflect the process of the interest confliction among foreign investors,controlling shareholders and the small and medium-sized shareholders.In the process,compared with controlling shareholders and foreign investors,the small and medium-sized shareholders are in the weak position in the whole process of foreign M&A.Specific performances are as follows:before the process,the small and medium-sized shareholders are in the weak position in the terms of the acquisition of the information and the decision-making power of foreign M&A;in the process,the small and medium-sized shareholders are in the weak position in the terms of the assets assessment,to determine the price of the shares, to supervise the process of M&A,to be out of M&A and anti-M&A;after the M&A,the small and medium-sized shareholders are weak in remedying their invaded rights and interests by legal means.There are many reasons for which the small and medium-sized shareholders are in weak position in foreign M&A,not only the reasons in the small and medium-sized shareholders,but also the reasons in foreign investors and controlling shareholders.Because the small and medium-sized shareholders are weak,in order to achieve the maximization of self-interest,foreign investors or controlling shareholders totally ignore or even wantonly violates the rights and interests of the small and medium-sized shareholders in the practice of foreign M&A.In order to maintain the basis of the modern corporate system and adequately mobilize the small and medium-sized shareholders,it is required to adopt some regulations to change the great disparity between the small and medium-sized shareholders and the foreign investors or controlling shareholders,to protect the legitimate rights and interests of the small and medium-sized shareholders effectively.The current democratically economic theory, equality theory and the basic spirit of law to protect the weak provide a theoretical support and a path to the change of the small and medium-sized shareholders' weak position in foreign M&A,which is to provide "biased" protection to the small and medium-sized shareholders in foreign M&A by the way of the perfection of regulations, and earnestly safeguard the legitimate rights and interests of the small and medium-sized shareholders.Foreign legislations have a long-term practice in the protection the rights and interests of the small and medium-sized shareholders and have formed a number of successful legal system specially to protect the rights and interests of the small and medium-sized shareholders,such as the United Kingdom created the system of compulsory acquisition and the rules of prohibiting obstruction;the United States established a complete system of information disclosure,a perfect system of market supervision and a strong self-regulatory system;Germany stressed to protect the rights and interests of the small and medium-sized shareholders in the whole process of the foreign M&A;EU introduced some specific legal documents to protect the legitimate rights and interests of the small and medium-sized shareholders specially,and so on. In the face of the status quo that the rights and interests of the small and medium-sized shareholders are invaded seriously in foreign M&A,we reflect on the current legal system of the protection of the small and medium-sized shareholders' rights and interests in foreign M&A.There are many problems in China's current legal system of the protection of the rights and interests of small and medium-sized shareholders in foreign M&A.Form a macro perspective,China's current specific foreign M&A legislation almost neglected to protect the rights and interests of the small and medium-sized shareholders;the other relevant legislation:the legislative level is low;the authority is not enough;regulatory system is not perfect;intermediaries need more development. Form the micro perspective,the shareholders resolution system is not perfect;the information disclosure system is insufficient;the Lutheran obligations of directors is too principle,and there are not provisions about relevant legal responsibilities;the system of mandatory tender offer is not operational strongly;civil liability is vacant;the way to assess the value of the shares is not defined clearly,and so on.To protect the rights and interests of the small and medium-sized shareholders in foreign M&A is a systematic project.Base on the advanced foreign experience and the national conditions of China, the paper advises to build a three-tier legal system including prevention in advance, control in the process and relief after the process,which will really hold up the legal "umbrella" for the small and medium-sized shareholders in foreign M&A.Particularly,in the terms of the prevention in advance,we will improve the corporate ownership structure,develop the institutional investors,raise the proportion of the independent directors and detail their division,and so on.In the terms of the control in the process,we will focus on strengthening the obligation of the controlling shareholders,innovating the shareholders' voting mechanism,improving the shareholders' resolution system, introducing the review mechanism by experts;strengthening the obligation of the acquirers;strengthening the faithful obligation of the directors;improving the assessment of the value of shares;and so on.In the terms of the relief after the process,we will improve the system of shareholder behalf litigation;strengthen the institutions to protect the interest of the shareholders;improve the civil compensation system and its implementation mechanisms;and so on.