Control The Regulation Of The Shareholders Of Related Party Transactions

The connected transaction which is the inevitable outcome of corporate development, is common both in listed companies or unlisted companies in China.Transaction itself is not associated with non-fairness,but because of someone's self-desires it often becomes non-fair. Controlling shareholders, lead a large part of the non-fair connected transactions. Effective regulation to controlling shareholders connected transactions,will facilitate capital market to develop healthy and orderly. The thesis analyzes the details of our existing relevant provisions,provides some advices on the improvement of relevant regulations and try to establish of the system in order to form a system which has a strong regulation upon controlling shareholders in the connected transactions so as to make their rights checked and balanced. In the thesis, the author uses methods of positive, comparative, and analytic to make a deep research on the connected transaction of controlling shareholders, in the hope to build up our rugulation system of connected transaction.There are four chapters in the text.The first chapter gives an account of a case and makes a legal analysis on it. In this part, the author uses the positive method to make a legal analysis on Wu Liangye asset replacement case which happened and provoked widespread repercussions a few years ago. For the widespread phenomenon of the controlling shareholder connected transaction in China's capital market, the author regards it necessary to make a legal regulation.The second chapter has a brief review on the connected transaction. In this part, the author uses analytic method to define the controlling shareholder connected transaction by specifically analyzing the concept of connected transactions and controlling shareholders. Also, the discussion of this part is the premise of the latter parts.The third part mainly discusses the necessity of legal regulation on the connected transaction. In this part, the author analyzes the necessity of building up such a system from three aspects, that is, the analysis of the advantages and disadvantages of the affiliated transaction and the analysis of the connected transaction by civil law and the features of the connected transaction.The fourth chapter sorts out and integrates our existing regulatory system so as to make it systematic and ordering, and talks about its improvement. In this part, the author divides it into three parts. The author uses comparative method to has a research on other countries'legislation to provide a reference for the improvement of our legal system. Firstly, the author suggests that the law should clarify that controlling shareholders should afford fiduciary obligation, as well as restrain part of their rights and establish some specific obligations. Secondly, the protection of the right of the minority shareholders should be improved by entitling shareholders the right to know, the right of cumulative voting and the right of accepting relief. Finally, in the author's opinion, to improve the protection of creditors of the company, we not only need to establish personal denial system and deep stone system, but also need to confirm the creditors'right to know and right of derivative litigation.