On The Voting Right Mechanism Of China's Preferred Shares

The pilot system of China's preferred shares is intended to build a multilevel capital market.The voting rights of preferred shares is one of the contents of the preferred shares system,although it is one type of voting rights of shareholders,there are many differences between the common shareholders,such as the nature of the right,the scope of the voting rights,the exercise of the elements,etc.There are many contents of the voting right of preferred shares,including the state of Non-voting in the general situation,the Reinstatement of Voting Rights and the Classified Voting Rights.The Reinstatement of Voting Rights focuses on the post disaster recovery after damage to the interests of preferred shares.The Classified voting mechanism will focus on prevention.This system framework of multiple layers forms the unique features of the preferred shares voting mechanism,including the restriction,advance relief short time and repeat-ability.Moreover,these characteristics and contents are based on the principle of equality of shareholders,the principle of majority rule and the concept of corporate autonomy.In the actual operation,the mechanism of preference shares'voting rights can meet the needs of different investors,improve the corporate governance structure,and improve corporate dominance.At the same time,the constructions of preferred shares voting rights are conducive to the maintenance of the interests of preferred shareholders,and promote the construction of various types of capital markets indirectly.There are still many problems in the voting right mechanism of preferred shares in China.At first,in the mechanism of Reinstatement of Voting Rights,the time conditions and the proportion conditions is not reasonable,without taking into account of the specific circumstances of different types of preferred shares.Due to inherent hysteresis of the preference shares voting system in the maintenance of the interests of its shareholders,it may also lead to the failure of the Reinstatement of Voting Rights in some cases.Secondly,the content or scope of the voting rights of the preferred shares is divided by a vague standard.The terms of the design are not reasonable.And when the shareholders held a special meeting of the general assembly,the program is also more confusing.At present,many companies in China have begun to issue preference shares.Improving the preferred shares voting rights mechanism is conducive to the maintenance of preferred shares rights.Preferred shares system in the United States and other countries has a long history.The voting right mechanism develops more fully.In the civil law,the law system of the preferred shares is stipulated in written laws by statutory legislative model.The Criterion of the Japanese Company determines the voting rights of preferred shares according to the risk of damage or the damage to the rights of the shareholders.And detailed lists of the 13 types of shares need to convene a special meeting to vote on the classification of the situation.Germany has provided a more immediate recovery strategy.The Common Law system is dominated by authorized legislation.Licensing company's regulations independently agreed on the preference shares voting system.Laws and regulations provide a certain degree of guidance to the company's articles of association.The British and the United States have defined the scope of the classification of voting category.And it is suitable for the classification of the voting rights of preferred shares.The British standard is"variation of class rights".The criteria for the rights of the United States class shares are "Involve,Influence or Changes in the articles of association of the company".We can adopt the following measures to improve the mechanism of voting right of preferred shares in China.Firstly,it is necessary to set the conditions for the Reinstatement of Voting Rights.On the condition of time,it's the time to adopt the strategy of relatively immediate reinstatement.In proportion,the pilot phase imitates the conversion price as the standard.According to the proportion,the Reinstatement of Voting Rights is not conducive to the protection of the rights of preferred shares.So it should be in accordance with the proportion of capital contribution of preferred shareholders to restore their voting rights.Secondly,The Reinstatement of Voting Rights in the protection of preference shares may cause system failure.Preferred shareholders must exercise the right to request the right to repurchase or the right of dividend distribution.At the same time,taking the cumulative preferred shares dividends interest to make up the loss of preferred shares.Thirdly,the Classified Voting Rights should be based on the variation of class rights.However,we must limit the scope of the right to change strictly and determine the boundaries of the change.We must determine the contents of the preferred shares by enumeration.Fourthly,the convening of a special meeting of preference shares should not set the minimum proportion.In the model,it should be selected to "Has convened,Classified voting".We must protect the interests of preferred shareholders from the point of view to set up a special meeting of preferred shares procedures.