The Law Case Evaluation Of Yaxing Co.V Ambow Education

VIE(Variable Interest Entities),issued a financial accounting concept presented in the US Financial Accounting Standards Board's Interpretation No.46 in 2003.Over the past 20 years,VIE structure is China's Internet,education and other special foreign investment restrictions exist in the industry's common foreign financing structure.China's regulatory authorities in the treatment of other overseas financing has been the use of strict supervision,but the attitude towards the VIE structure is somewhat vague.It is argued that the VIE structure violates our foreign investment industrial policy and realizes the entry of foreign investors to restrict and prohibit the entry of foreign investment industry.Therefore,there are a series of legal risks.In the case of Yaxing Company v.Ambow Education,Ambow Education Holding Company has set up a series of VIE contracts between Ambow Online Company and Ambow Company through the signing of "Exclusive Cooperation Agreement","Subscription Equity Agreement" and "Power of Attorney" VIE structure,the operating company that Anbo company and Yaxing signed a Hunan Changsha Tongsheng Lake Experimental School and Hunan Changsha Tongsheng Lake kindergarten rights and other related rights and interests of the "cooperation framework agreement." In the course of the trial,the two sides of the main focus of the dispute:the validity of "cooperation framework agreement" between Yaxing company and Ambow company and Ambow education company to build VIE structure is legal or not.For the dispute,Ambow company is a domestic enterprise,"cooperation framework agreement" is the true meaning of both sides,and does not violate the laws and regulations of the mandatory provisions should be effective.For the dispute ?.by analyzing the VIE contract between Ambow Online and Ambow company,it can be found that the structure of the VIE structure may be illegal but does not affect the effectiveness of the Cooperative Framework Agreement.From the case and other series of cases can be seen,VIE structure itself,there are legitimate risks,default risk,tax risk and many other risks,pending the legitimacy of the VIE structure of the judicial authorities to the relevant cases of the trial A lot of passive.In view of this,the article also put forward to adapt to the development trend,the development of new "foreign investment law" to reduce the "foreign investment industry guidance directory" restrictions on foreign investment,clear regulatory body,unified supervision caliber,improve regulatory rules,strengthen information disclosure Some suggestions,for some extent,provide a reference for China to clarify the legitimacy of VIE structure and improve the supervision of VIE structure in China.