Protection Of Medium And Small Shareholders’ Interests In Company Delisting

In 2014, China Securities Regulatory Commission(hereinafter refer to as “CSRC”) issued a file named” the opinion of reforming and strict implement of the delisting system,” which claims to be the most stringent delisting rules, aims to perfecting the delisting system of listed companies and Strengthen the protection of medium and small shareholders’ rights. Since the first time the delisting institution was ruled in the "company law" in 1994, has been more than twenty years. It is perfecting with the development of the securities market. At present the delisting institution to can be divided into: the delisting institution of the main board and the delisting of the growth enterprise market by where the company was out, and it can be divided into: active delisting and compulsory delisting by who decided the delisting. As the new rules of the delisting institution of main board and growth enterprise market were published, the process of the delisting in main board and growth enterprise market are becoming similar. There are only different in the conditions of delisting and application for re-listing. Therefore, the below don’t compare the differences. As to the delisting initiative and forced, the initiative delisting is an extension of the right to operate company independently, which is decided by the General Meeting of Shareholders. The delisting is the custody of the securities regulatory authorities, which is decided by according to the securities regulatory authorities to expel the bad companies from the securities market. The nature and process of the delisting initiative and the forced initiative are different. The damages of the minority shareholders in active delisting are the voting in shareholders’ meeting and the price of the stock. So we should care about the Sheer imbalance of power between the delisting company and its controlling shareholders with minority shareholders. Delisted directly restrict the trading and the price of stock, we need to focus on the remedy of losses of minority shareholders in delisted. Although the system of the initiative delisting and forced delisting is different, the minority shareholders are easy to infringement by the listed company and its major shareholders. Because they lack of expertise, are difficult to access to information. Whether initiative delisting or forced delisting is due to protect the minority shareholders. If minority shareholders suffer losses in delisting, they resisted the implementation of the delisting, even vote with their feet and leave the stock market. The main distinction of this paper is analyze the problem of the protection of minority shareholders in initiative delisting and forced delisting system, and make recommendations.This thesis is divided into three parts except the introduction and conclusion. The first part introduces the basic theory of delisting institution, containing the meaning and the impact of delisting, the value of special protection. The second part analysis the development and the problems of minority shareholders rights protection system in delisting. The third part proposes some solutions to improve the protection of medium and small shareholders in delisting. Details are as follows:The first chapter is to introduce the delisting system and the value of protection of the minority shareholders’ interests in delisting. The basic theory of delisting system, include the meaning and value of delisting system. Secondly, the delisting affects the prices and liquidity of the stock. Thirdly, analyze the legal basis to protect minority shareholders of delisting company, which contains three principles: the compact principle, the principle of balance of interests and the principle of fairness and justice. Finally, we should protect the minority shareholders of detailing company, because the existence protection of minority shareholders is generally inadequate, and the protection of minority shareholders can improve the corporate governance mechanism, promote the delisting system and the development of the capital market securities.The main content of second chapter is to discuss the development process of the protection system of minority shareholders in delisting system, and analysis the problems of our current protection of the minority delisted shareholders. Active delisting cases are rare and the lack of typicality in China’s stock market, therefore this thesis analysis our current protection of the minority shareholders in active delisting by the comparison with the rules and classic cases in other developed securities market. There are three problems in current protection of the minority shareholders in active delisting, which are the voting rights of the minority shareholders in the delisting resolution, the claim right of assessing the stock price, the appeal and relief right of delisting resolution. The development of compulsory delisting system is earlier and faster than. Although the compulsory delisting system are more perfect than active delisting, there are some problems needed to perfect, which are the failure of the risk warning system and consolidation system, the lack of a unified system and strict punishment of information disclosure, the imperfection of civil Remedy and other risk diversification system, the malfunction of the over the counter stock trading system malfunction.The third chapter is mainly to discuss how to improve the protection of minority shareholders in delisting system by learning from the experience of other stock market. For active delisting, the first suggestion is to make detailed provisions about the special voting rights of minority shareholders to protect minority shareholders willing in the resolution of the shareholders’ meeting. Second, perfect the function of independent directors and the third-party evaluation institutions to improve the bargaining right of minority shareholders. Finally, improve the special reporting system, resolution reconsideration rights and civil remedies to protect the appeal right of minority shareholders. For compulsory delisting, first should promote the reform of IPO registration as soon as possible and improve the system of delisting risk warning, delisting consolidation period and the appeal right of delisting; secondly, establish a clear detailed unified information disclosure system, expand the main responsibility and Increase penalties of information disclosure to improve; thirdly, expanded the scope of the admissibility of the case in securities market, cancel the pre-filing procedures to simplify the cost of civil remedies; Finally, a sound stock trading center trading patterns, expand trading volume and share price to pay center; Finally, perfect the stock trading system in Small equity trading center to expand the trading volume and share price.Improve the protection of medium and small shareholders’ system in delisting is important to promote the normalization of the delisting system. But the conservation status of the current protection system of medium and small shareholders is unsatisfactory. Therefore, this thesis is to find the problem of the medium and small shareholders’ protection system in active delisting and compulsory delisting. Analysis the problem and give the solutions to protect the interests of medium and small shareholders in delisting system, in order to improving the normalization of delisting system.