Research On Cross-shareholding Legal Issues

Cross-shareholding can play a positive role in countering hostile takeover,promoting collaborative operation among enterprises,facilitating the flow and collection of funds and avoiding transaction risks.Likewise,there are some negative effects,such as inducing internal control,resulting in inflated capital,causing insider trading and being easy to form industry monopoly.As a special mode of capital operation,the advantages of crossshareholding should be guided to give full play to its positive effect.For the harmful aspect of cross-shareholding,it is also necessary to set legal regulation on it.It can be called an ideal state if the negative effect is mitigated and avoided,thus to prevent the risk.Cross-shareholding can be expressed as a more complicated mode of capital operation on which the domestic scholars have relatively single perspective and less in-depth study.There are also no specific stipulations on the system of cross-shareholding in relevant laws of our country,and the legislation in relation to cross-shareholding is basically in a blank and stagnant state,which needs to be solved urgently in the coming new era of supervision.Based on the actual situation of China's legal system,acts,including a comparative analysis of the legislations on it in relevant countries,the construction of a legal system on cross-shareholding and then put it under the regulation of such legal system,shall have far-reaching significance for the cross-shareholding itself,for our economy,as well as for the development of enterprises.While the developed countries is on the road of regulating cross-shareholding in accordance with the characteristics of their own legal systems,China makes no progress in terms of its exploration of cross-shareholding.After comparing and analyzing relevant legal situations in developed countries,it is concluded that three kinds of legislation model are available for our choice.What kind of regulation mode should be chosen,how to regulate and how to perfect relevant laws are the main contents of this paper.Through the research,we find that compared with developed countries,our current legal system remains less developed and imperfect.Though we can not rationally exercise a lax legislation mode in practice,but it is not conducive to the economic development of our country if we completely forbid it.In fact,in order to not only guide the order and rational development of cross-shareholding,but also to minimize systematic harm caused by the complicated design of cross-shareholding transaction structure in the absence of relevant laws,a legal regulation mode that offers differentiated treatment will be the first choice for our country at present,and that is to distinguish between cross-shareholding by parent-subsidiary company and by non-parent-subsidiary company and to further perfect relevant supporting legal system while offering separate regulation on those two cases.