The Study On The Legal Issues Of Voting In China's Preferred Stock

The preferred stock is the most typical and the most common type of the Class stock, which has a history of more than 100 years since its birth.As a kind of financial instrument combined equity with debt, the preferred stock can not only make rapid financing in the premise of stabilizing the company's corporate governance structure, but also meet the needs of diversification of the main investors.The promulgation of "Preferred stock pilot management approach"marks the formal establishment of preferred stock system in China. In order to protect the legitimate interests of preferred shareholders, the tenth of the "Preferred stock pilot management approach" lists the five situations that need to hold an assembly to vote the class of preference shares.However, compared with relevant provisions of applicable scope of class voting rights in other countries such as the United States, Japan, Germany and other countries, there are two problems in the entity and procedure in our country.First, in terms of entities, class voting rights of preferred stock have a too broad applicable scope, lack of flexibility, over protect preferred shareholders, hinder the freedom of corporate behavior, and reduce the company's decision-making efficiency, which is contrary to the priority principle of commercial efficiency;. Secondly, in terms of procedures, it fails to provide a minimum number of participants for the effective convening of the general meeting of shareholders, the absolute nature of the voting takes effect to reduce the efficiency of the company's decision-making,, and to exclude the voting rights of special interested shareholders, which may lead to unfair voting procedures that the general meeting of shareholders cannot represent the will of the preferred shareholders, and cannot achieve the purpose of restricting the abuse of the rights of ordinary shareholders,and shareholders 'General Meeting and General Shareholders' General Meeting are held to increase the cost of decision making.In this proposal, learning from the legislative and practical experience of foreign countries, to balance the interests of the company as a whole and the interests of preferred shareholders,and based the standard that the change of the right of priority may cause damage to the rights and interests of preferred shareholders, by reducing the mandatory provisions to the provisions of the Articles of Association of capital adequacy provisions,etc., to reduce the scope of voting in China preferred stock category;and introduce the independent directors system, regulation the preferred shares of the general number of shareholders to the minimum number of participants, respectively, held by the shareholders of the General Assembly and the general meeting of shareholders, and improve the interests of shareholders voting system,we will establish a more reasonable applicable scope of class voting rights of preference shares, refine preferred stock class voting procedures, guarantee the realization of substantive justice through procedural justice, in order to achieve the balance between the preference shares and the overall interests of the company.