The Legal Regulation Of Management Buyouts Of Listed Companies

Listed companies' management buyouts refers to the management staff of listedcompanies purchasing the shares of the listed companies run by themselves byutilizing their ownership capital or exterior financing, for the purpose of changingcompanies management into shareholder ,further ,changing the structure of the listedcompanies' share power and control power. Management buyouts, as an innovationin corporation incentive mechanism, play important roles in the active promotion ofstate-owned enterprises reform in China, in the promotions of the strategicrestructuring of national economy and consummation socialistic market economy.Due to the absence of special laws and regulations on efficient control over MBO inChina, there arises numerous problems in listed companies' management buyouts inChina, negatively influencing the active role of management buyouts, bringing newtasks of legislation on listed companies governance and Securities Law.This article centers on an analysis on listed companies' management buyoutsfrom the view of legal science. It is divided into three parts.The first part being a brief introduction of management buyouts, analyzing itsconcepts and legal characteristics, contrasting management buyouts in China withthat in foreign countries, providing a general perspective about the presentconditions of management buyouts in China and its development situations inforeign countries.The second part is about the legal issues existing in China in managementbuyouts, mainly analyzing the problems of subjects, financing problems, pricing ofshares, information disclosure, connected transactions and surveillance, etc. Owingto the existence of the above-mentioned issues, the listed companies' managementbuyouts in China is rarely regulated, leading to numerous losses of state-ownedproperties in China, setting a barrier to the smooth development of managementbuyouts in our country.The third part, as a key part, deals with related legal countermeasures on theimplementation of listed companies' management buyouts in China, mainlyanalyzing the articles to be consummated in such laws as Corporation Law,Securities Law. Further, this part provides suggestions for legislating RegulationsFor the Implementation of Management Buyouts through making use of thesuccessful experiences and modes of developed countries. Besides, the article makesan introduction on the present conditions of share-trading reform carried out inChina, on the basis of that, analyzing the promotive effects in the implementation oflisted companies' management buyouts brought by share-trading reform and thenecessity of strengthening the legal construction of MBO.With the development ofrelated legal system, listed companies' management buyouts would be regulated,legally controlled, enabling listed companies' management buyouts to play a moreand more important role.