Non-circulating Shares Of Split Share Structure Reform Commitments

Split-share structure reform,"share reform" for short,refers to exchanging for the circulation right of non-tradable shares so as to transform part of the tradable shares of the listed companies and the equity structure of non-tradable shares and thereby realize the unification of these two kinds of shares by compensating the circulating stock shareholders to a certain degree through such consideration arrangements as stock distribution,share compressing,buy-back and dividends payout in accordance with the relevant provisions of the Corporate Law of the People's Republic of China(hereinafter referred to as "Corporate Law"), Securities Law of the People's Republic of China(hereinafter referred to as "Securities Law") and a series of other normative documents concerning share reform in China.Share reform has now entered the commitment encashment period,however,cases of major shareholders breaking share reform promises occur frequently.This has resulted in a series of research and discussions on the relevant legal problems of share reform in the academia.Whether from the perspective of technique or law,there exist lots of legal problems urgently need to be tackled when it comes to the implementation of share reform policies.For example,the legal nature of share reform plan,the meaning of consideration in share reform plan and the legal basis for payment,the effectiveness of share reform promise,and the legal responsibility of breaking share reform promises,and so on.The key for solving these problems lies in resolving the issues on the legal relations between the two kinds of shareholders of listed companies, namely,non-circulating stock shareholders and circulating stock shareholders.The clarification of these issues will contribute to the better protection of the civil rights of investors.This thesis discusses the legal nature,legal effects and legal responsibilities of violation of share reform promises in four parts.The first part introduces the background of share reform promises, that is to say,as the important components of the share reform plan,these promises are the various consideration arrangements such as stock increase, stock lock-up,asset injection and presetting minimum share holding ratio made by the non-circulating stock shareholders.It also explains the phenomenon of breaking promises through examples.The second part is about the legal definition of share reform promises. It first clarifies the legal nature of the share reform plan,that is to say,the plan represents a contractual relation between non-circulating stock shareholders and circulating stock shareholders of the listed companies,the plan has the legal nature of contract.It then states that the consideration of share reform plan shall be a treatment payment non-circulating stock shareholders give to the circulating stock shareholders,the consideration is the core content of the contractual relation and the essential precondition of the contract after referring to the definitions of consideration in Western contract laws and by analyzing the basis of payment of share reform consideration.Finally,this part analyzes the relations between share reform promises and consideration,and states that share reform promises are an important component of share reform consideration,and the share reform promises shall be defined as contract provisions that have legal effects and shall be the obligations of one party of the contract based on an in-depth analysis of the pros and cons of the various theories of the academia,such as contract theory,legal documents theory,morality promise theory and unilateral legal act theory.The third part is about the legal effects of share reform.Through introduction and analysis of the typical types of share reform promises in practice,especially the two promises of share increase and assets injection, and by analyzing the pre-contracts in contract law theories and third party beneficiary contract,it states that share reform promises have the same legal effects as contracts.The fourth party analyzes and defines the four types of violation of promises and conducts research on the legal responsibilities that shall be assumed by the relevant parties based on the analysis of contract law theories(violation of share reform promises is categorized into: non-implementation,partial implementation,delayed implementation and refused implementation of share reform promises) and the contents of the promises.Finally,the writer states that,as part of the share reform plan,share reform promises are an important component of share reform consideration and have the same legal effects as contracts,and the relevant parties shall bear the responsibility of breaking the share reform promises.