Study On The Exercise Of Shareholder's Preemptive Right During The Indirect Acquisition

With the development of economy,the dispute of equity transfer is more and more frequent and complicated,of which most cases arise from the issues of shareholders' right of preemption.However,as equity trading becomes more and more hidden,the structure of the equity transaction becomes more and more complex,and the paradox between human rights and the liquidity of the equity of the company is becoming more and more complicated.The case of "the king of the Bund",Shanghai,is a typical case,from which a new legal question was raised,which is still widely discussed today.Can shareholders advocate infringement of their preemptive rights under the indirect acquisition mode?In my opinion,shareholders' right of preemption should not be applied under the indirect acquisition model.First of all,from the perspective of legal interpretation,the legal concept of Article 71 of the “Company Law” is very clear.If shareholders want to exercise the right,there are two strategies over the legal interpretation: a)Explanatory interpretation of Article 71;(b)Analogy or purposeful expansion of Article 71.Regarding the strategy of expansionary interpretation,the extension of the legal concept contained in Article 71 is very clear and there is no room for expansionary interpretation;even if it is necessary to expand the meaning of theArticle 71,the “indirect shareholder” under the indirect acquisition cannot fall within the scope of the possible context of the legal concept of “Shareholders”,so it is not possible to carry out expansionary interpretations;and the applicable premise of analogical application or purposeful expansion is the existence of legal loopholes,but according to the current legislative situation.From the perspective of Article 71,the“white space” over indirect acquisitions is a legal silence rather than a loophole.Secondly,from the perspective of interest measure,there are two kinds of interest in this case,which are the interest of “collaboration of human” and interest of“the freedom of the stock rights' transfer”.Secondly,from the perspective of interest measure,there are two kinds of interest in this case,which are the interest of“collaboration of human” and interest of “the freedom of the stock rights' transfer”.I think the interest of “the freedom of the stock overweighs the interest of“collaboration of human”,which can be proved from three aspect.Firstly,the legislative model over preemptive rights is semi-closed;Secondly,there is limitation factor in Article 71,which is the preemptive right only can be exercised under the same term.Lastly,the Corporate Law Judicial Interpretation IV shows that justice tendency that in commercial transactions,the parties ' autonomy should be more respected.Therefore,compared to “collaboration of human”,the essence of the company should be capital combination.In summary,shareholders' right of preemption should not be applied under the indirect acquisition mode.