The Analysis Of VAM Legal Essence And Legal Effect

Abstract:Due to the development of China’s capital market imperfections, Corporate financing problem has not been effectively resolved. Therefore, some companies are turning to the international capital markets, And make the "agreement on gambling," enter the Chinese market. Gambling agreement, also known as the valuation Adjustment Mechanism (refers as VAM)refers to the contract arrangement, reached by investors and the target company or the shareholders in private equity(refers as PE) investment concerning on titling some rights to either side when a certain event takes place. Mengniu is to bet on the success of fame gambling agreement, And then the Prince of milk, Paradise letting other companies failed to bet on gambling agreement to carry a stigma of such capitalist plunder Chinese capital instruments. Some questions about the nature of the VAM dispute has not stop.2009HaiFu Corp. v. Gansu Shi Heng company does not fulfill an VAM case is the nature of the problem and the effectiveness of the agreement will bet into a cusp.The author first introduces the background of the case Haifu V. Gansu ShiHeng case and the trial, the court of second instance verdict, lead to controversy.The second part describes the nature of the VAM. First, the author introduces the concept of VAM and generate motivation, Followed by an agreement on gambling legal relations introduced to elicit discussion of the nature in gambling agreement, Finally, the introduction and comparison of conditional contracts and options contracts aleatory contract agreements are drawn on gambling aleatory contract conclusion.The third part of the legality of gambling agreement were discussed, because our laws on gambling did not make the relevant provisions of the agreement, the author cites the relevant principles of contract law to make inferences, from the body, meaning that the legitimacy of the three study areas, Demonstrate the legitimacy of the agreement on gambling.Finally, the author through the first comment of the case on gambling draw some issues worthy of reflection, And thus thinking, leads to the risk of this problem gambling agreement, By then the risk of introduction of gambling agreement proposed agreement effectively prevent the risk of gambling measures and recommendations from both investors and financiers. This also is the ultimate point of this article.