| Private Equity investment Funds in China is developing vigorously, the valuation of the adjustment mechanism (Valuation Adjustment Mechanism) makes indispensable contribution. Valuation Adjustment Mechanism, with its functions of valuation adjustment, incentive restriction and governance improvement, to ensure the investment security of Private Equity Funds and lock its investment risk. It is just because of the perfect fit between Valuation Adjustment Mechanism’s function and Private Equity Funds, after entering into the private equity investment industry in our country, the exotic Valuation Adjustment Mechanism has created famous capital myth such as Mengniu, Suntech Power only in a few years. Although Valuation Adjustment Mechanism is a kind of new contract instrument, there is no subjective color by itself, but with the worsening economic situation, in recent years, the enterprises of our country present the results of "Every bet on lose". During a special short period of time, the medias promote that International Private Equity Fund is a kind of new instrument to plunder the wealth of the Chinese enterprises. In the past, it was so popular, but now it is too difficult to survive. So such fate of Valuation Adjustment Mechanism is root in evil of capitalism, or rejection reaction of China’s current laws? In this article, I will trace back to the theoretical origin of the Valuation Adjustment Mechanism, explore the nature and value of Valuation Adjustment Mechanism and reveal the inevitability of its existence and development in our country’s financial market. And adopting the methods of case analysis, comparative analysis and interest measurement, I analyze and study the legal problems and the dilemma of the Valuation Adjustment Mechanism under the current legal environment in our country.The theory origin of Valuation Adjustment Mechanism is diverse and complex, and because of its theoretical complex, it can be classified as a non-zero sum game of Option Hedging Agreement under the incomplete contract. Just because of its theoretical complex, create a grand occasion of valuation adjustment for Private Equity Fund. But extremes meet, without the condition of economic rapid development, Valuation Adjustment Mechanism emerged alienation phenomenon under the existing legal system of our country, the most representative case is’The First Case of Valuation Adjustment Mechanism’, namely Hai Fu Investment Case, after three times of judgments, from the first judgment of identifying on Valuation Adjustment Mechanism is null and void, to the retrial verdict of limited confirmation, its legal effect and enlightenment deserve our deep thinking.After the Hai Fu Investment Case, the legal effect of Valuation Adjustment Mechanism has being focused by many scholars. I take the Hai Fu Investment Case as the basic material, follow the legal judgments of the three trial court, and propose the problem of’Difficult to Definite the Valuation Adjustment Mechanism’. Then I take the civil and commercial law as a research perspective, through the legal analysis of the Valuation Adjustment Mechanism by comparing the invalid contract agreement system and interest measurement,, and finally confirm the legal effect of the Valuation Adjustment Mechanism.From Hai Fu Investment Case, we found that the legitimacy of Valuation Adjustment Mechanism is only one of the blocks to the existence and development of Valuation Adjustment Mechanism in China’s private equity investment market. In order to make Valuation Adjustment Mechanism get out of the predicament of law, we must get rid of four aspects of fetters including rigid trial in judicial practice, totally prohibit attitude of the supervisory departments, over transform of the market and lack of domestic supporting systems. Through the rational exploration by comparison method, I propose regulation measurement, such as judicial departments should distinguish between different subjects and different interests to confirm the effect valuation adjustment, set the creditor self-help program to solve the rules problems, utilize the characteristics of program methods to release the space of financial innovation; The administrative department, especially the regulatory authorities and people’s government, should actively introduce corresponding policies and regulations, and try to gain the initiative in the international market and guide the valuation adjustment from the macro to ensure its benign development. In the process of valuation adjustment, the market subject shall make accurate analysis to advantages and disadvantages, as well as the structure of valuation adjustment with cautious, objective and rational attitude to gain a win-win result. The main task is introducing and establishing supporting system which can remove the confrontation of valuation adjustment; The establishment of the credit system and the risk market rules shall improve the valuation adjustment market; the internal control mechanism of foreign risk investment association shall be learned; In this way, the valuation adjustment can play its correct role in the special multi-level capital market of China. |
