How To Perfect The Legal Regulations Of Unfair Related Transactions Of Listed Companies

Related transaction is a kind of normal market behavior. However, in recent years, the securities market of China has emerged in a lot of unfair related transactions by listed companies, seriously doing harm to the interests of investors and creditors and destroying the good order of the securities market. Although the relevant entities have been fined by China Securities Regulatory Commission, the investors have already born investment losses due to wrong trust, and the negative effects on the securities market cannot be eliminated. As one of three big problems in the regulation of securities market, related transactions has presented the non-affiliated and recessivation tendency in recent years and caused greater difficulty for regulators. In this background, we should regulate the behavior of unfair related transactions of listed companies in China as soon as possible.This article is divided into four chapters and the logical structure is as follows:The first chapter, Related Transactions, Related Parties and Controlling Shareholders of Listed Companies. If we want to regulate the unfair related transactions, we should first define the category of related transactions and related parties. This chapter summarizes the definition of related transactions and related parties combined with China’s accounting standards and the related files of China Securities Regulatory Commission and Stock Exchange. It also evaluates the current status of legislation in China. In addition related transactions are classified according to the need of prose in this chapter.The second chapter, The Game of Unfair Related Transactions of Listed Companies-- Viewing the Key Points of Legal Regulation from an Economic Perspective. Related transactions attribute to a game of interests in parties. Therefore, the key points of unfair related transactions regulation can only be figured out by a concrete analysis of mentality and behavior of different parties. In unfair related transactions, controlling shareholder plays a key role. Therefore, this chapter analyses the key points of unfair related transactions regulation by analyzing the game between controlling shareholder and institutional investor, the game between institutional investor and minority shareholder and the game between controlling shareholder and manager.The third chapter, The Regulation and Self-examination of Shareholders’ Unfair Related Transactions of Listed Companies. This chapter is divided into three parts. The first part provides detailed summary of the current legal provisions; The second part analyses the intrinsic logic of provisions in the first part; The third part analyses two key policies-- the decision-making procedures of related transaction and the information disclosure policy and introduces the relevant legislative experience abroad.The fourth chapter, Perfect the Legal Regulation of Shareholders’ Unfair Related Transactions of Listed Companies. In view of the key points of legal supervision put forward in the second chapter and the current status of legislation, this chapter put forwards ideas of regulation as follows: First, set the principle of shareholders’ fiduciary duty. Second, optimize the existing constraint mechanism and perfect the decision-making process and the information disclosure policy, making the controlling shareholder’s illegal unable to be embodied; Third, construct a comprehensive regulatory system, especially establish standards for judicial review to protect minority shareholders; Fourth, increase the cost of unfair related transactions, strictly investigated the civil liability and criminal liability of the related subjects.