Protection Of The Interests Of Minority Shareholders In The Governance Of Listed Companies In China

The protection of minority shareholders is the cornerstone for the development of Chinese Security market. With the development of China's market economy and capital market, the exploitation of minority shareholders becomes a very prominent issue. Due to the nature of the modern corporation, to jeopardizes the interests of minority shareholders is equivalents to the infringe on the public interests. Moreover, the exploitation not only violates the rights of minority shareholders, but also endangers the healthy development of the market economy. These problems have hindered the further development of Chinese securities market and blocks its way for SOE to go abroad, to compete and financing capital in overseas security market. Therefore, we must pay great attention and study this issue on both theory and practical side.The current research on the protection of minority shareholders is essentially from the point of corporate governance through economics, law and management perspectives, analyzing from the view of Business Ethics with specific case study in this field is still relatively small, so this paper will focus on Huaneng merger from Business Ethics point of view, to analyze the minority shareholders'interests and the fiduciary duty of majority shareholders in corporate governance.In the introduction part, we first propose the urgency and importance of minority shareholders'protection, and points out the significance on theory and practical research under the basis of existing research literatures and then choose a corporate which has highly representativeness in its ownership structure, management methods, economic development and future direction for all the Chinese corporations. Through this case, we explore the implications of minority shareholders interests by focusing on a takeover that took place in a large SOE in 2000, the case target on an international acquisition with respect to balancing the interests of different groups of shareholders in both China and America Security market.ChapterⅠintroduces the case of Huaneng Power International M & A, and points out the study from the point of Business Ethics:corporate ownership structure, Management of economic issues, the fiduciary duty owed by the controlling shareholder and other issues, with above mentioned, the paper fix the targeted research methods, the framework and structure.ChapterⅡanalyzes the ownership structure and governance of SOE, with which find that the structure implicit the lacking of ethic matter in protecting minority shareholder. The ownership structure differs from U.S. companies have push this acquisition under more stringent and demanding scrutiny and was criticized by the western media and scholars. Actually this defect does not equals to the fact that Huaneng power have jeopardized the interests of overseas minority shareholders in Shandong Huaneng, The U.S. security market also face the problem of minority shareholder's interest being expropriated by manager. So only the integrity of controlling shareholder to perform fiduciary duty can preclude the exploitation of minority shareholders.ChapterⅢanalyzes the controlling shareholder's fiduciary duty to minority shareholders on a large scale from ethic and practical level. If Huaneng Power have fulfill the duty of integrity in this International M&A:the authenticity of information disclosure, the fairness of financial advisors's fair value, the unity of fairness and benefit to reflect the fiduciary duty of majority shareholders to minority shareholders. The ethical factor for the different investment returns in minority shareholder form the acquirer and the target companies, the paper uses Marx's theory of the dialectical unity between physical capital and virtue capital as a theoretical basis, which reach the final conclusion.ChapterⅣsummarizes the beneficial aspects in protecting the minority shareholders in developed stock market, we hope this may have some reference for China securities market, finally this paper indicates the deficiencies for this research and its future direction.