The Legal Regulation Analysis On The Protection Of The Minority Shareholders In The Process Of Public Companies Going Private

Recent years, there is a tide named going private in negotiable securities market. It includes not only such state-owned business like CNPC and SINOPEC did privatization to his public subsidiary, but also some private enterprises like Alibaba did the same operation. Public companies’going private is just a new way to integrate in China’s capital market, but is mature in western countries. Definitely, public companies’going private refers to a merger transaction by the ways of offer buy, merger and so on in order to end the qualification of circulating in the capital market.On the basis of analyzing the legal principle and value for protecting the minority shareholders, I got a conclusion that we need set up a special regulation to regulate the behaviors during going private. It contains:1) strengthen the fiduciary duty of controlling shareholders;2) explicit the minority shareholders’participation rights and approval rights;3) improve information disclosure requirement:expand the subject of duty in information disclosure requirement; add contents to information disclosure;4) clear the system about the repurchase rights for dissent shareholders; perfect the minority shareholders’litigation rights;5) consummate the rights and duty of companies’ board directors and supervisors:make sure the independence of board directors; clear out supervisors’proposal rights and representative rights;6) improve the securities regulatory institution’s responsibility; strengthen function of self-regulation organization and build up a special organization for protecting the minority shareholders.