Hedge Fund The Exercise Of Shareholders' Rights Of Freedom And Constraint

The activities of hedge funds in the global financial and capital markets have aroused a great concern. It has been a question which we have to face that how should we deal with the challenge of hedge funds, although the developments of the capital markets in China still fall behind. This thesis intends to give an introduction and study on how Germany handles the challenge, given by hedge funds, in aspects of the legislation and judicial experiences and academic research, in order to provide beneficial material and discussion on how China should regulate hedge funds. Besides this, this thesis tries to focus on the deep reason deprived from the phenomenon of hedge funds. This reason is the tension between company and capital markets. This chapter also studies and emphasizes the importance of company's benefits on company law.As a beginning, the famous case of Deutsche Boerse AG is to present in the introduction of the thesis.ChapterⅠ: A brief introduction on the concept and characteristics of hedge funds, and the pattern of hedge funds'behaviors is presented in ChapterⅠ. Hedge funds are famous for their radical action; They force the managers unpredictably into changing the company's business plans, so that they can benefit from short‐sell and so on.ChapterⅡ: Two questions caused by hedge funds are analyzed in this chapter: occasional majorities and empty voting. Both questions seem to be complicated. Actually, the conflict of interest between hedge funds and targeted company is the common characteristic. Two main solutions to this situation will be described in this chapter. One is to enhance the duty of disclosure by improving legislation; the other is to solve the abuse of shareholders'right in each particular case using loyalty duty of shareholders. ChapterⅢ: The advantages and disadvantages will be analyzed in this chapter. Compared with enhancing the duty of disclosure, solving in each particular case is more flexible and available.ChapterⅣ: The theoretical basis, necessity of admission and contents of loyalty duty of shareholders are fully presented with a background of judicial verdict and academic research in Germany. As a capital company, a joint stock company is less people‐combined than a personal company or a limited liability company is. However, if a shareholder in a joint stock company could harm other shareholders'benefits, the existence of loyalty duty of shareholders would be reasonable.ChapterⅤ: The Company Law of China prescribes the duty of the shareholders that they are not allowed to harm the benefits of the company and other shareholders by abusing their rights. So it is necessary to identify company benefits. The admission and boundary of company benefits are discussed in this chapter.Finally, a conclusion includes the summary of this thesis and writer's opinions.