On Judicial Relief Of The Shareholders’ Right To Know

Chinese Reform and Opening-up has passed for more than thirty years. During thisperiod, our country has been in a conflict of economic system transition and socialtransformation. The gap between the ideal and the reality, as well as a variety of problemsarisen from the social background are urgently to be solved.Shareholders are just investors for a company and professional management takeresponsibility of the operation. However, only when the shareholders know the company’sfinancial status and business information deeply, they can exercise their inherentshareholders’ right actively. It will effectively realize the supervision to the behaviour of theboard of directors, preventing illegal activities which damages the interests of the companyor shareholders, and making timely relief come true. Therefore, shareholders’ right to knowis the essence requirement of exercising shareholders’ right, also the basis and the premiseof other rights. In fact, this right is not a purpose right but an instrumental right.Because of the development of the company system in China starts relatively late, theprotection of shareholders’ right to know is not enough indeed. Compared with foreigncountries, our country neither establish the right to appoint inspector, nor be lack of theguarantee of right of inspection which is about the shareholders’ right to know in China,especially the building of judicial relief system. Besides, the restriction of exercising is thedeficiency and the legal norms are generally simple. So it is difficult to achieve the purposeof strengthen the protection of the rights, also balancing the conflicting interests.In addition, the disputes about the shareholder’s right to know exist in a large amountin reality. Some relevant cases are short of clear standard of application of law andunification of law enforcement. So some similar cases have quite different verdicts. Intheory, there are some problems and insufficiency of judicial relief of the shareholders’ rightto know in legislation. We need to draw lessons from abroad which has has relativelymature and systemic theory.Therefore, this article reveals some typical problems exist in the judicial relief ofshareholder’s right to know, and clarifies the way of solving the problem, also puts forwardsome rational proposals. In order to build more perfect protection mechanism of theshareholder’s right to know and achieve the harmony of the corporate governance structure.Chapter One: Introduction. As the starting of this article, it first illustrates thetheoretical meaning and practical meaning, economic background and legal background ofwriting this paper. Literature review is divided into two pieces of domestic and abroad,which the foreign one mainly focuses on the legislation literature. Finally, combining thepresent situation of the research of judicial relief about shareholder’s right to know in our country, this passage puts forward the problems to be solved and the expected effect.Chapter Two: Theoretical Basis of the Judicial Relief in Shareholder’s Right to Know.It first analyses the justiciability of shareholder’s right to know from the perspectives of thegeneral theory of civil procedure and judicial intervention in corporate governance. Andthen it subdivides into three sections to discriminating the litigation nature of theshareholders’ right to know. They are the discriminating between suit of declaration andaction of enforcement and change action, the discriminating between the litigation ofshareholder bootstrap and the company’s total profit, the discriminating betweenshareholder direct action and derivative litigation. After analysis, the author shows the pointof view which be agreed.Chapter Three: Subject Qualification Dispute of the Litigation of Shareholder’s Rightto Know. From this chapter, the article focuses on difficult problems of the litigation ofshareholder’s right to know in actual practice with deep discussion. This chapter centersaround the subject qualification dispute, including the determination of the plaintiff and thedefendant. Plaintiffs involve dormant shareholders, nominal shareholders, shareholders whofund defectively, retiring shareholders and shareholders who have special identity. Thedefendants involve companies, directors, and controlling shareholders or actual controllers.Chapter Four: The Burden of Proof of the Litigaton of Shareholder’s Right to Know.According to the difference of types and specific exercise of shareholders’ right to knowregulated in the company law, this chapter enumerates the burden of proof under severalkinds of circumstances of the litigation of shareholders’ right to know respectively. Thecases mainly include the burden of proof under the right of inspection, the right ofreproduction, right to address question and information disclosure. The burden of proof ofthe right of inspection and reproduction are different because of the differences among thecompany’s article of associations, meeting minutes, resolutions, financial reports,accounting books and the original accounting documents.Chapter Five: Our Country’s Improvement of the Judicial Relief System ofShareholder’s Right to Know. This chapter starts from present situation of the legislationand the insufficiency in China, it puts forward some ideas to perfect the judicial reliefsystem of shareholders’ right to know, mainly includes three aspects, namely, adding thecause of action, improving judicial proceedings, as well as the judicial relief of thecompany when shareholders abuse their rights to know.