A Legal Study On The Protection Of Minority Shareholders' Interests In The Management Buy - Outs Of Listed Companies

Management buy-out is a new way of mergers and acquisitions, which empowers the managers the dual identity of owner and operator, and the external agencies involve in overseeing the management effectively to expand its core business, then actively build core competitiveness and promote optimal allocation of resources, thereby improve the corporate governance system. However, MBO means the change of control, which will have a significant impact on the company’s business and the interests of shareholders. How to maintain the relationship between the Company and its shareholders is a very important issue in the acquisition process. The controlling shareholders and managers would take advantage of its status and the asymmetry of information, and harm the interests of the minority shareholders. Therefore, the state must protect the interests of minority shareholders through legislation and other means, in order to build a legal system of management buyouts and relief measures in the condition of protection of the minority shareholders as soon as possible.This paper calculates the financing mechanisms of management buyout through comparative legal research on protection system of the United States, the European Union (UK), and Japan; and reveals the risk against acquisition of the interests of minority shareholders; and streamlines the law about corporate, securities, information disclosure system and other relevant regulations for the legal protection of minority shareholders’interests; and describes the status of the legal protection of a management buyout of minority shareholders. Finally, the paper proposes the supporting solutions, including legal supervision, information disclosure, independent directors and shareholder representatives’ litigation, which aims to enable management to focus on the protection of the legitimate interests of the minority shareholders in the corporate acquisition progress.