The Protection Of The Interests Of Minority Shareholders In Acquisition Of Listed Companies

In the theory of corporate governance, the protection of minority shareholders has been one of the most important research contents. In 1932, American scholars Berle and Means referred to the separation of ownership and control in the company’s judgment in their famous "The Modern Corporation and Private Property", which is considered to be a precedent of corporate governance. From then on, the way to protect the interests of minority shareholders has become the core issue of corporate governance. Since the 1990 s, China’s capital market has undergone considerable change, the more significant of which is the change in the economic adjustment during operation as an important means of social efficient allocation of resources in our acquisition activities developed every year. However, the acquiring company often brings changes in a company the right to operate on the company’s operation and development will inevitably have a major impact. Therefore, the issue how to balance the company’s controlling shareholder and other shareholders especially minority shareholders cannot be ignored. According to the current practice, it can be seen in the acquirer in the acquisition process, in order to achieve the purpose of acquisition, controlling shareholders do illegal activities. As a result, it is not only against the interests of the target company, the interests of minority shareholders are also severely affected. At the same time, in order not to relinquish control and anti-takeover, formal controlling shareholder will defend their shares, which in fact make two group of shareholders meeting or directors meeting. They had to attend to the company’s normal business management, resulting in the economic interests of minority shareholders have been seriously violated. This not only resulted in inefficiency and waste of social wealth of resources, but also makes the rights of minority shareholders because of damage do not get effective relief and loss of confidence, and gradually shrinking the size of the market.Nowadays, China’s protection of the legitimate rights and interests of minority shareholders after the damage is mainly focused on monetary compensation. However, many scholars debate that securities civil compensation of causation determination and calculation of damages are not reasonable, and some of them suggest that collective action should be introduced as an addition of monetary compensation to improve the system. In my opinion, there are not direct and clear internal relations between making false statements from the acquisition of information disclosure obligations and investment decisions small investors make. Minority shareholders should come up with effective complete evidence to convince the judge: "If I had known that the acquisition news, I will make a completely different decision." It is difficult to prove a thing did not happen, what is more, it is even more difficult to do that in the securities market full with a variety of contingencies, while there are many deficiencies the calculation of damages. Therefore, I propose an alternative way of thinking that is establishing a correcting system. A correcting illegal system means that in order to prevent irregularities reserves acquired by misconduct in the interests of the securities regulatory department shall request violations offending party to correct the illegal activity so that two parties would back to a particular state which assuming that the violation does not take place. The acquirer does not benefit minority shareholders can also avoid losses from the source. The way I indicated can provide some reference to the protection of the interests of minority shareholders.