Legal Regulation Of Shareholding Of Chinese Companies

As the new development of the company system, Cross‐shareholding of company refers to that two or more independent companies become each other’ shareholders on the base of holding each other in a nutshell. It originated in Europe and the United States,had it’s peak in Japan. It started late in our country,but developed rapidly. By playing an active role in Chinese state‐owned‐enterprises reform, Cross‐shareholding of company has become a common phenomenon,especially between the listed company.As a kind of system, Cross‐shareholding of company has its “two‐sided”.It’s advantages include: Improving the company’s financing ability,Stabilizing the corporate structure, Giving full play to the advantages of cooperative, Optimizing the allocation of resources, Promoting the development of company group, All these are conducive to the growth of the company strength.However,its disadvantages should also not be ignored. It’s disadvantages in the company law : Increasing the company’s capital,Violating the Capital‐real principle, Damaging the interests of minority shareholders, Destroying the corporate governance structure; It’s disadvantages in the Securities law : Distorting the price of the stock,Inducing “Insider trading” and “Related party transactions”,and so on.Avoiding the constraint of The antitrust laws.There are legal loopholes in our country, Relevant policies and regulations have lost their legal effect,it is a pity.After we refer to the legal provisions of other countries and combining with the situation of our country,I think it is appropriate to take the “discriminate model” of the Germany and Japan. Cross‐shareholding of parent‐subsidiary corporation should be generally prohibited, It is just allowed under the exceptions.The ordinary Cross‐shareholding of company should be limited in shareholding ratio and voting rights.Because Cross‐shareholding of the listed companies is common in our country,and there exists differences between the listed companies and private companies,so different laws and regulations are fit for them.The Cross‐shareholding of private company refers to the practice of the Germany and Japan, in addition to this, Special provisions should be made for Cross‐shareholding of the listed companies.