| In 2000, SINA first creates VIE structure, and successfully lists on NASDAQ. VIE structure becomes popular afterwards in China's emerging industry in order to achieve overseas listing and financing. However, VIE structure is not perfect. The advantages of this mode to circumvent restrictions may also be its weaknesses. In recent years companies are suffering a lot for taking VIE structure to list on offshore capital market. Alipay event, New Oriental event and ChinaCast Education event all lead a very negative influence on offshore listing Chinese companies. Meanwhile, the securities regulators abroad are strengthening their supervison. This paper adopts literature research and empirical research methods to analyse the legal risks of VIE structure and tries to put forward relating solutions. The followings are the four parts of this paper.Chapter one focuses on the origin of the legal risks of VIE structure. Through the analysis of VIE concept and the cause of production, it attempts to conclude possible risks of VIE structure.Chapter two concentrates on the details of VIE legal risks and its supervision situation. The first part introduces several famous Chinese red chip stocks to tell that VIE structure is a combination of opportunities and risks. The second part gives more details about Judicial attitudes and regulatory norms of the VIE structure.Chapter three aims at assessing the legal risks of VIE structure from the perspective of legal theory. The instability of VIE structure, the intricacy of foreign exchange and tax as well as the severity of supervision will all increase the relating risks.Chapter four tries to provide some proposals about risk control concerning VIE structure. VIE is a product of the foreign investment policy adjustment during transition period. We must concentrate on reducing risks of contractual control about VIE structure and looking for innovative approaches to improve domestic capital market for encouraging China's concept stocks to come back. |
PDF Full Text Request