Research On The Legal Regulation Of Connected Transactions Of Controlling Shareholders Of Listed Companies

As a common economic phenomenon,related transactions are generated naturally in the operation of market economy development.Although there are many advantages and disadvantages,the facts that the listed companies use the related transactions to hurt the interests of minority shareholders and creditors have caused the outbreak of the scandal,which makes the affiliated transactions leave the impression that the advantages outweigh the disadvantages.On the one hand,from the economic point of view,related transactions can transfer the independent transactions and individual transactions of enterprises following the market competition mechanism into enterprise group's internal transactions,in order to make full use of enterprise group internal resources,save transaction costs and accelerate enterprise operation effectiveness.On the other hand,the parties involving in related transactions are often unequal in nature,and one parties can use their influence and control over the other parties to violate the principle of fair dealing and harm the company and its the interests of small shareholders voting by foot lift and investors.In addition,the party with control and influence in the transaction can also make use of related transactions to avoid tax,transfer interests of the company,get formation of market monopoly and other illegal items on the legal cloak.It is common to see related transactions in China's listed companies,state-owned enterprises and limited liability companies.Because of listed companies openly raising funds in the securities market,involving the interests of many small and medium shareholders,the listed company's transactions have more far-reaching impact on the economy,and result in more prominent legal issues.Relevant data show that listed companies and their parent companies carry out related transactions as high as 40 percent,involving huge financial exchanges and displaying relatively complexity.Because of most of the listed companies in China have the characteristics of centralized ownership structure,the controlling shareholders are more likely to obtain control of the company to carry out related transactions.If the government can not take regulation of related party transactions effectively,the development of the securities market will be hampered by a huge obstacle.At present,related laws in China are too rough and not detailed to regulate related transaction,Such as the principle stipulated in "Company Law" and relevant rules andstandards of China Securities Regulatory Commission and Shanghai StockExchange and Shenzhen Stock Exchange.It can be seen that our country's law on the level of regulation is low,lack of overall regulatory ideas.At the same time,prevention system of unfair related transactions arising from listed companies information disclosure system,shareholder voting rights to avoid the system still have shortcomings.The accountability system for unfair related transactions has not yet been established.This article starts with the legal regulation of related transactions of the listed companies,combs the shortcomings of the present law in China,draws lessons from Germany,the United States,Hong Kong and other countries and regions outside the system design,to perfect the legal regulation system of related transactions in China.This article propose some suggestions from the aspect of previous prevention including obligations of shareholders and security responsibilities,information disclosure system,shareholder voting rights from avoidance.Moreover,end of the article describes some remedies such as the censorship of the court on the fairness of related party transactions,the shareholder derivative litigation,and the revocation of the contract of unfair related party transactions.