Study On The Legal Effect Of The Valuation Adjustment Agreement Between Investor And Financing Company

Nowadays,due to the prosperity of the private equity investment in China,the imported valuation adjustment agreement(VAA)has been working as one of the most important valuation tools in the financial market.It has been frequently used to solve problems between investors and financing companies such as the asymmetry of information,the difficulty of valuing targeted enterprises.In recent years,VAA with cash compensation and share buying-back has been widely applied to private equity investment.In China,as the first case heard by court on VAA dispute "Hai Fu case"has a strong impact on the private equity investment field and the academic world.The court believed the required compensation in the agreement was far in excess of the company's operating performance,which would largely damage the interests of the company and its creditors.However,we can't take it granted that any VAA between investors and financing companies does not take into effect under the law.The design of the VAA in practice may introduce the measures such as installment financing mechanism or preferred stock from Anglo-American law system,so as to avoid the result in opposition to the principle of company capital maintenance and the result of damaging the interests of creditors.So that the VAA can play a role of an effective investment tool to better serve the capital market.This dissertation focuses on the previous issues.In addition to the introduction and conclusion,it consists of four parts.The first part gives the definition of the VAA and introduces some common types in judicial practice to reveal the significance of VAA.The second part analyses the current law and regulations on VAA between investors and the financing companies.The focuses are put on the legal issues for VAA from the perspective of "contract law" and "company law",attempting to justify the VAA between parties.This part also analyses the invalid reasons and its consequences,in order to finally return to the value conflict between the legal regulation and the freedom of contract.The third part reflects the valuation adjustment methods based on the content of the second part.In the fourth part,the proposal on the design of the content of VAA is submitted,and brings up suggestions responding to the future changes of the relevant regulations.