Research On Regulation Of Valuation Adjustment Mechanism

Private equity investment originated in Europe and the United States in 1940s and had its first prosperous period in 1980s,it plays an important role in the development of economy and finance as a financial innovation tool of capital market,.After entering China,it experienced a rapid development for more than 10 years and had big market development potential.Valuation adjustment mechanism,commonly known as the gambling agreement,is a transaction structure in the private equity investment in the transaction between the two sides who can not reach a consensus on the valuation of the transaction.Due to the very uncertain company's future operating conditions,the two sides of the investment and financing mechanism use the valuation adjustment mechanism to facilitate the final transaction,which is widely used in practice.The valuation adjustment mechanism of private equity investment has many types.In addition to changing the way of equity rights,cash compensation,equity compensation,equity repurchase are all the forms of regulation,which are subject to the principle of capital maintenance to a certain extent.In the first case of the gambling agreement-the Haifu case,The Supreme Court with a clear judicial decision on the shareholders and shareholders of gambling effective,and the company is not valid on the gambling position.However,it is obvious that there are some problems in the judgment,so it has been controversial in the academic and practical circles.Under the new situation of capital system reform,even if the gambling is between shareholder and the company,it may also has its rationality and legitimacy for loss of company capital and solvency,not touching the bottom line of the corporate capital maintenance principle.This should also be given support and affirmation.And this was clearly ignored in the Haifu case and the invalid judgment is biased.This paper is divided into three parts:introduction,text and conclusion.The first part introduces the background of the selected topic,and summarizes the present situation of the valuation adjustment mechanism and the application in practice.At the same time,this part introduces the perspective of capital maintenance principle,and show the purpose of this paper.In the first chapter,by analyzing two cases,this paper expounds the attitude of the court and the arbitration in the practice of the valuation adjustment mechanism,so as to clarify their respective positions,and draw a conclusion from the positions.The second chapter introduces the connotation and principle of valuation adjustment mechanism,and elaborates the types,including cash compensation and equity compensation,equity repurchase and change the way of equity rights of four types.The third chapter elaborates the connotation,the principle of capital maintenance in the applicable provisions of the domestic situation,relevant content combined with the reform of company capital system,the principle of the influence of capital on maintaining and impact.The fourth chapter focuses on the effectiveness of valuation adjustment type from the capital maintenance perspective,with multiple levels of full analysis of effective and invalid,reflects the shortcomings of current judicial position and attitude,so as to provide solutions for the next part of the theoretical basis.The fifth chapter focuses on how to regulate and protect the interests of creditors after the capital system reform,then provide suggestions for standardizing the operation of the valuation adjustment mechanism and the protection of the interest of creditors.The conclusion part of this paper summarizes the viewpoints and conclusions.Relying on capital system reform background,the paper clarifies the position of shareholder and the company on gambling without violating the capital maintenance principle of rationality and legitimacy.And it put suggest not defining all the gambling between the shareholder and the company as invalid,but we should re-examine the judicial attitude,improve the valuation adjustment mechanism,and effectively protect the interests of creditors to make the judicial judgment more persuasive and fulfill the essence of capital system reform.