The Judgement Criteria Of Persons Acting In Concert During The Takeover Of Listed Company

The takeover of listed company, as one of the most common capital operations, gains its popularity, complication and diversification. Subject to information asymmetry, natural monopoly and spillover effect, the takeover of listed company need to be regulated by mandatory tender offer and information disclosure system. To avoid the regulation, person acting in concert commences on the securities market. System related to person acting in concert is created for punishing the above behavior. This paper demonstrates the system related to person acting in concert, with introducing the basic theory, foreign experience, domestic practice and reform resolution of the regulation of person acting in concert.The introduction states that the takeover of listed company plays a great role in current merger and acquisition, along with the existing condition of the takeover of listed company. Then, brief two typical cases to reveal the importance of research on System related to person acting in concert.The body contains for parts.The first part explains:(i) the reason of regulation of the takeover of listed company, which are information asymmetry, natural monopoly and spillover effect;(ii) the method includes mandatory tender offer and information disclosure;(iii) in fact, buyers act in concert to avoid the obligation and regulation. System related to person acting in concert is created for punishing the above behavior. This part introduces the regulation and theory basis, foreshadowing the following parts.The second part introduces the regulation of persons acting in concert of The Takeover Code, The Williams Act, Securities Exchange Act and Code on Takeovers and Mergers. Also, this part gives a summary of legislation rules and principles, while describes the background and procedure.The third part sums up the difference between the judgement criteria of Interim Provisions on the Management of the Issuing and Trading of Stocks(1993), Security Law(1999), Regulations on the Takeover of Listed Companies(2002) and Measures for the Administration of Disclosure of Shareholder Equity Changes of Listed Companies(2002), Security Law(2005) and Measures for the Administration of the Takeover of Listed Companies(2006), surrounding the history of China’s stock market. In every stage, one typical case is brought up to reflect the problem and the latter improvement.The fourth part suggests the brand-new territory criteria via Xin Mei case and reconsiders the existing marriage criteria via Luo Lai Jia Fang case. In the meanwhile, three suggestions are brought up. Security Law shall take the lead of regulation of person acting in concert. The consequence of acting in concert and civil responsibility of stock exchange shall be clarified. Self-disclosure of the investor shall be enhanced. Site investigation of the regulator shall be enhanced. The investigation right shall be entitled to the target company.