| In order to resolve the equity separation situation of China's securities market andeliminate the obstacles made by it, on April 29, 2005, with the approval from the StateCouncil, China Securities Regulatory Commission (CSRC) launched Issues Relevantto Pilot Reform Projects Regarding the Separation of Equity Ownership and TradingRights of Listed Companies Circular, regarding the release of non-tradable shares intothe open market, indicated the beginning of the Equity Separation Reform of China'ssecurities market and therefore drew considerable attention from investors worldwide.With a legal vision, this article does a research to several issues of the reform from arespect of protection of shareholder's rights. After a general analysis of the legal basisof protection of shareholder's rights, the author talks about the impact of theseparation of equity ownership upon shareholder's rights and, based on this point, theauthor believes that protection of shareholder's rights is the core issue of theEquity-separation Reform of China. This issue exists among all the listed companies,and shall be resolved properly with a guidance of related laws and regulations. Theauthor analyses the "consideration", class voting and dissenters protection of thereform and other detailed problems the listed companies may be faced with during thereform. The author also talks about issues related to B-share and H-share. The authorargues that to promote the reform, the legal meaning of "consideration" shall beclarified and class voting, dissenters' appraisal as well as the legal compensationsystem related to the reform. The author points out that the supervisors and theshareholders of non-tradable shares shall pay a great attention to the protection ofshareholder's rights. The shareholders of non-tradable shares, shareholders of tradableshare as well as the shareholders of foreign shares shall negotiate and communicatewith each other and in doing so, to avoid the deadlock situation during the reform. |
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