A Study On The Regulation Of Cross-Ownership Between Corporations

Cross-ownership is prevailing. It is an inevitable phenomenon after corporations can become a shareholder. Corporations often utilize cross-ownership as a measure to strengthen the management, prevent the hostile takeovers and contribute to the corporations engaged in the diversified operation. But lots of corporations often use it to increase stock prices or form monopoly. While mutual shareholdings between two corporations could have some advantages, it dose have resulted in some undesired disadvantages.This thesis adopts literature analysis and compared approach to discuss the issues. In addition to discuss the types, legal effects and scholars views, I also introduced some legislations of United States and Japan. Besides, Taiwan’s legislations deserver to learn. I hope it can be helpful for the improvement of regulations of cross-ownership by comparing and analyzing.This thesis mainly studies cross-ownership and cross-voting. Chapter Ⅰ is a preamble. It is elaborates the concept, types and present situations of cross-ownership. The advantages of cross-ownership are strengthen the management, stabilize share price, prevent hostile takeover and so on. But at the same time it can lead to bubble in stock market and disrupt the order of competitive market. Chapter Ⅱ states the legislations of cross-ownership, cross-voting and monitoring methods in United States and in Japan. After that I discussed the conscientious attitude we should have when we try to transplant other countries’legislations. I hope it can be helpful for the improvement of regulations of cross-ownership by comparing and analyzing. Chapter Ⅲ focuses on the legal deficiency of cross-ownership in China. We can clearly understand the attitude of legislations by analyzing the objects and amounts of cross-ownership. The system of treasury share and the limit of the share repurchase can be avoid through cross-ownership between parent and subsidiary corporations. Chapter IV mainly talk about perfect the legal regulation of cross-ownership. Putting forward my ideas that the emphasis is strengthen the monitoring mechanism. For the drawbacks caused by cross-ownership, it should be regulated from three perspectives. From the perspective of Company Law, we need to prevent capital inflated. We should be committed to optimize the company’s internal control, exert the role of shareholders, supervise the operators and establish asset credit standards. It is make sense to strengthen the information disclosure system from the perspective of the Securities Law. The requirements for information disclosure must be basis on different types of cross-ownership, for the level of impact on the securities, capital and competition market. From the perspective of Anti-monopoly Law, we should pay attention to guarantee free competition in the market, with which to break the monopoly situation. Compared to the ordinary company, cross-ownership companies are easier to produce a tendency to monopoly, monopolistic agreements or concerted practices. Therefore recognized standards of monopoly agreements and concerted practices on company of cross-ownership should be different with ordinary company.The study on cross-ownership is often limited within a legal framework. The single perspective inevitably lead to errors when we analysis of the problems. Such as the recommendations made in the Company Law may not withstand in the Securities Law or Anti-monopoly Law. The innovation of the thesis is analysis of the legal regulations of cross-ownership from company law, securities law and anti-monopoly law perspectives.