A Study On The Problem Of Valuation Adjustment Mechanism In The Equity Investment

This thesis mainly makes a discussion of the subject, the content, the nature and the legal effect of Valuation Adjustment Mechanism. And then, the author would comb the concept of Valuation Adjustment Mechanism and introduce the debates that whether the target enterprise should be the subject of Valuation Adjustment Mechanism, the typical Valuation Adjustment Mechanism’s in practice, the theoretical basis of the validity of Valuation Adjustment Mechanism, several theories of the nature of Valuation Adjustment Mechanism, such as the theory of Conditional Contract,Guaranty Contract, Option Contract, Aleatory Contract. At last, the author would make an introduction of the debates on the legal effect of Valuation Adjustment Mechanism.This paper believes that named contracts couldn’t cover the characteristics of Valuation Adjustment Mechanism, therefore it is a new type of innominate contract, and its legal effect should be recognized. This thesis expounds the rationality and legitimacy of weather the target firm should to be the subject of Valuation Adjustment Mechanism.The agreement, between two parties, is legal that the target company shall repurchase investor’s shares. The author also believes that Valuation Adjustment Mechanism would not break the legal provisions of company listing. So-called “the guarantee clause” is lawful, because it is not equal to return guarantee. The author holds an opinion that we should acknowledge the force of law of Valuation Adjustment Mechanism and insist on the principle of timely information disclosure. We should also strictly supervise the operation of an enterprise, break the barriers of the doctrine of capital maintenance and encourage creativity to promote the development of economy.