Research On The Effectiveness Problems Of Valuation Adjustment Mechanism

With the rapid development of the market economy,more and more investors choose to invest in fast-growing SMEs in the form of private equity investment.Although this investment method can enable investors to obtain great economic benefits,there are corresponding Investment risk,in order to reduce this investment risk,China’s venture capitalists began to use the "Valuation Adjustment Mechanism"(Valuation Adjustment Mechanism).In recent years,due to the particularity of the gambling agreement,scholars have been controversial about its nature and effectiveness issues,and the Supreme People’s Court’s decision on the "Haifu Investment Case" will push the gambling agreement to the public’s view.Therefore,in order to promote economic development and encourage transactions,it is necessary to study the effectiveness of the gambling agreement.This paper is divided into four parts to demonstrate the demonstration of the effectiveness of the VAM.The first part is the basic theory of the gambling agreement.First introduced the concept,function and characteristics of the gambling agreement.And after analysis,this paper considers the gambling agreement as a conditional contract,and analyzes the difference between the VAM as a contract in commercial activities from the perspective of company law.Secondly,it summarizes the types of clauses of the gambling agreement,which can be divided into the agreed terms of the gambling target,the consequences clauses and the control clauses brought about by the realization of the goals.Finally,the effective requirements for the gambling agreement are demonstrated.The second part is mainly to study the difference in the validity of the gambling agreement clause in legal practice.First of all,starting from the typical case "Haifu Investment Case",the different criteria for determining the effectiveness of the gambling agreement are summarized.Secondly,through the study of the types of gambling agreement disputes after 2014,the effect of the gambling subject on the effectiveness of the gambling agreement is compared.That is,the investor and the target company are usually ineffective against the gambling,and the original shareholders of the target company are effective against the gambling.Finally,it is analyzed that the arbitration institution is different from the people’s court in the determination of the effectiveness of the gambling agreement,because the arbitration has greater flexibility,convenience and inclusiveness.The third part is the basic rules for determining the validity of the gambling agreement.Firstly,from the perspective of contract law,the legality of the gambling agreement is demonstrated.Through research,it is considered that the subject,meaning expression and content of the gambling agreement should be studied to determine its effectiveness.Secondly,from the perspective of company law,it demonstrates the effectiveness of the gambling agreement,and when it signs a gambling agreement for a specific subject,it should pay attention to the approval of the preprocedure,and the content does not violate the relevant provisions of the law and other issues to study its effectiveness.The fourth part is the proposal proposed in this paper to ensure the effectiveness of the gambling clause.First,we should start with internal measures,that is,both parties should fully complete the due diligence,reasonably set performance targets and ensure that the agreed terms do not violate the law.Secondly,it is necessary to construct a legal soil suitable for the survival of the gambling agreement,to clarify its nature as soon as possible,to strengthen the judges’ judgment process and to unify the rules of the referee,and to issue guidance cases to unify the judicial recognition standards.