Related Party Transactions And Disclosure Of Listed Companies

In the listing companies, the related trading is so frequent that it has played an extremely active part in adjusting the operational structure, enlarging the scale of enterprises and enhancing the economic strength of listing companies. However, a great deal of unfair related trading and the nonstandard exposure of trading information have molested the normal trading order and seriously infringed on the benefits of small and medium investors. It has been put on an increasingly prominent position to strictly standardize the related trading of listing companies. The first part introduces the meaning of the relationship between related parties and the characteristics of related trading. The second part analyses the present conditions and problems of the listing companies in China, revealing that the root of unfair related trading is the structure of stock rights peculiar to listing companies. It analyses the trading types of related parties and the causes and forms for unfair related trading. In terms of content, there are two types of related trading: business contact and assets reorganization; in terms of the direction of flow of interests, unfair related trading is divided into two types: demanding and giving. The market economic structure is not ideal in the period of transition economy, the state-owned share alone covers more than 50% in the stock rights and the rights has been magnified, the related laws and regulations are not perfect and the supervision of related departments is not strict enough, all of which account for the unfair related trading. In the third part, there are reflections and suggestions on how to standardize the related trading of listing companies. The key to standardize the trading of related parties is to establish and improve the system of control by a legal person within the corporation. And the listing companies should make an effort to minimize the related trading. When inevitable major related trading occurs, intermediaries should be involved to ensure that the trading is fair, open and just. At the same time, strictly control the exposure of information about related trading, which should be objective, full and accurate to make the information as open and transparent as possible. The related trading should be under the supervision of the public to effectively curb the unfair related trading. Civil compensation system and judicial relief measures should be established and improved to protect the victims when unfair related trading causes damage to the stock market and investors. In China, it is of significance to conduct further research and practice on the case law to guard the violations of laws and rules such as false information, trading on inside information and market fraudulence.