The Research On Remaining Shareholders Freeze-out System Of Delisted Companies

The sound of delisting of listed companies for capital market has vital significance to realize the fittest survival and enhance the market main body activity. As one of the follow-up measures of voluntary delisting of listed companies,the lack of remaining shareholders freeze-out system in Chinese Securities Law, is not conducive to offerer improving efficiency and reducing cost of acquisition. To protect remaining shareholders in listed companies, when the total share capital or equity distribution structure does not conform to the law provisions, remaining shareholders may exercise the right of Buy-out, but offerer is not vested with mandatory exclusion rights. In the case of acquitting most equity of target company, offerers are often faced with predicament that remaining shareholders can not be found or remaining shareholders are unwilling to sell shares.Companies are investment economic organization for shareholders. To realize the interest of shareholders, the operation of company must be orderly and efficient. Not affecting fairness, efficiency is the tireless pursuit in company operation. The establishment of remaining shareholders freeze-out system to solve the remaining shares in the acquisition of listed company, is a recipe for both interest protection of investors and cost and efficiency of offerers. So, this dissertation will combine Chinese legal system and realistic environment, and demonstrate the legitimacy of Chinese introduction of remaining shareholders freeze-out regulations, and study its application conditions, exercise program, reasonable compensation for the freeze-out shareholders and the freeze-out shareholders’ relief, then raise recommendations for the establishment of Chinese remaining shareholders freeze-out regulation.This dissertation, besides introduction and conclusion, is divided into four parts.The first part, the concept of remaining shareholders freeze-out. Definite the meaning of remaining shareholders freeze-out, clarify the relationship between remaining shareholders freeze-out and shareholders’ existing company and delisting of listed company.The second part, the value of remaining shareholders freeze-out system. Critically analyze scholars’ questioning, such as departure from the voluntary principle, violation of the principle of equality, breaking the balance of interests among shareholders, not conducive to the development of the security market, and so on. And legitimate the system by means of the balance relationship between efficiency and fairness. Remaining shareholders freeze-out system is not only the pursuit of efficiency, but also the guard of fairness. Both of them can coordinate in remaining shares freeze-out system.The third part, the applicable rules of remaining shareholders freeze-out. This part includes application conditions, exercise program, the reasonable compensation for the freeze-out shareholders and the relief for the freeze-out shareholders who have dissent. In the application conditions part, study whether the system can apply to all types of companies, and offerers’ equity accumulate to which percent to make them exercise the right of compulsory elimination. In the case of meeting the application conditions, study time limitation and way for offerer to squeeze out remaining shareholders. If the remaining shareholders are freezed out, this dissertation will focus on how much compensations can the shareholders freeze-out get and which way can they get the compensation and the time limitation for offers to pay compensation. If the shareholders freeze-out object to the compensation, this dissertation will study the relief they can get.The forth part, the recommendation for establishment of Chinese remaining shareholders freeze-out regulation. Chinese existing securities law, has established the right of Buy-out for remaining shareholders. To complete the establishment of remaining shareholders freeze-out regulation, the key is to establish offerer’s compulsory elimination right which corresponds to Buy-out right, and other conditions being absent in existing securities law, such as prohibit offerer meeting shares requirement in disguised way, establish appropriate compensation and payment guarantee for shareholders freeze-out, and vest effective relief measures for shareholders freeze-out who have objections.