Analysis On The Case Of Hai Fu Investment Company Sue The Gansu Shi Heng Company

Equity investment is conducive to optimize the allocation of social resources,and as a common tool of equity investment,“VAM” actively protect the interests ofinvestors, greatly promote the active investment and the development of enterprises,brought economic prosperity, so that more companies get the money of investment.“VAM” contains the word of “bet”, and is similar to gambling contract，but is quitedistinct from each other from the objective, function, performance and other aspectsand consequences.“VAM” is not “gambling”, its essence is cast probabilisticfinancing arrangement on both sides of the equity investment, is a kind of tool toguarantee receipts, discover the price, and motivate the management.The decision of the case let us recognize judicial organ’s attitude towards “VAM”.It is given a conclusion about the effectiveness of the terms of “VAM”, and alsoestablish some principle for the practice of the private equity: it is invalid that theinvested company take obligation of compensation, on the other side, it is valid thatthe original shareholders take the obligation of compensation. Due to the object andthe content of “VAM” are different, in practice, there are a variety of forms. Weshould take specific analysis on the obstacles and implementation of it under Chineselaw.In practice, whether investment institutions (investors), or the financing party,should take “VAM” seriously which has been proved correct as a kind of tool ofcapital market instruments by practice. Neither abuse, also cannot ignore and evenexclude, refuse to bet against the “VAM”, We should be according to the specificcircumstances of each financing case, choosing the proper “VAM” on the content andform, and as far as possible to retain sufficient development space for enterprises,promoting the development of Chinese enterprise, investment and financing market,to share the dividends by the fast growth of enterprise.