Research On The Protection Of Small And Medium-sized Shareholders' Rights Under The Double-Share Structure

The dual-share structure is different from “the one-share one-power” structure.By issuing some high-voting shares,the company gives the founder or chief manager of the company higher voting rights,which enables the founder or chief manager of the company to continue to have control over the company while satisfying the financing needs.Since a large number of domestic high-quality enterprises such as Baidu,Jingdong and Alibaba went overseas for listing,more and more domestic experts and scholars have been studying the dual-share structure.With Xiaomi's first listing on the Hong Kong Stock Exchange with dual-share structure,China has also allowed companies with dual-share structure to be listed in the draft for the implementation of Scientific Innovation Board,indicating that China has begun to accept companies with dual share-structure to be listed in China.However,the dual-share structure is different from the one-share one-power structure.If its high voting rights are not restrained and controlled,it is easy to infringe upon the rights and interests of other shareholders.Therefore,how to establish a complete set of protection mechanism for shareholders' rights and interests is the key to implement the dual-share structure and give full play to its maximum effect.This article focuses on the protection of the rights and interests of small and medium-sized shareholders.It will analyze the problem of the damage to the rights and interests of small and medium-sized shareholders under the dual-share structure,and finally draw some suggestions on the protection of the rights and interests of small and medium-sized shareholders.In the process of writing the article,the author sorted out the domestic and foreign documents of the dual-share structure through the method of literature research,and grasped the current research status of this topic.Through historical research methods,the basic concept and development history of dual share structure are combed,thus deepening the understanding of dual-share structure.Through comparative research methods,this paper analyzes China's legal systems related to the dual-share structure and the protection of shareholders' rights and interests,and then refers to and draws lessons from the relatively perfect dual share structure and the protection system of minority shareholders' rights and interests in foreign countries.Combined with China's actual situation,it finally puts forward some own ideas and suggestions on the protection of minority shareholders' rights and interests in terms of high voting rights in the dual-share structure,information disclosure,civil compensation mechanism for securities infringement and independent directors.In addition to the introduction,this article is divided into five parts:In the first part,the basic concepts of the dual-share structure and the protection of the rights and interests of small and medium shareholders are sorted out.Starting from the ownership and ownership structure,and then to the definition of the dual-share structure and its historical reasons,the author tries to analyze it from the origin of the dual-share structure.By comparing the structural differences between the dual-share structure and one-share-one-vote principle and the differences between high voting shares and preferred shares,we can better understand and define The dual-share structure.Finally,it introduces the types of protection for the rights and interests of small and medium shareholders.The second part analyzes China's dual share structure and the relevant legal system for the protection of the rights and interests of small and medium shareholders.By analyzing the relevant legislative provisions in China,it points out that China has not explicitly prohibited dual share structure,leaving legislative space for other share structures at the legal level,and has shown an acceptance attitude towards dual share structure in recent years.In 2019,Shanghai Stock Exchange will allow companies adopting dual share structure to be listed on China's Scientific Innovation Board.However,the system of protecting the rights and interests of shareholders supporting the implementation of the dual share structure is not perfect enough,pointing out that the system of protecting the rights and interests of small and medium shareholders in our country still needs to be perfected.On the basis of the first two parts,the third part analyzes the protection of minority shareholders' rights under the dual share structure.Research has been conducted on companies that have adopted dual share structure.Some of them take Facebook as an example to analyze the reasons why dual share structure is easy to infringe the rights and interests of other small and medium-sized investors,i.e.shareholders.The reasons and analysis of the infringement of the rights and interests of small and medium-sized shareholders are respectively expounded from the following aspects in the dual share structure: the excessive voting rights of high-voting shares,the abuse of voting rights by holders of high-voting shares,the hollowing out of the company by taking advantage of their own advantages,and the imperfection of the civil compensation system for securities,including the problem and analysis of the infringement of the voting rights of other shareholders by excessive voting rights,the problem and analysis of the easy abuse of voting rights by founders or senior management personnel of high-voting shares,the problem and analysis of the lack of a perfect relief system for shareholders' rights and interests,and the problem and analysis of the low level of the securities infringement punishment degree.In the fourth part,aiming at the problems existing in the protection of the rights and interests of small and medium-sized shareholders described in the third part,the relatively mature foreign dual share structure and the legislation for the protection of the rights and interests of small and medium-sized shareholders are analyzed.The first analysis is the legislation for the protection of the dual share structure and the rights and interests of small and medium-sized shareholders in the United States.The United States adopts a free authorization mode for dual share.However,in terms of supporting measures,the United States restricts the issuance of high-voting shares in the dual share structure and also restricts the circulation of high-voting shares,mainly to prevent holders of high-voting shares from easily damaging the rights and interests of other small and medium-sized shareholders.Secondly,it introduces and analyzes the dual share structure of Britain and Singapore and their legislation on the protection of the rights and interests of small and medium shareholders.Britain has adopted a stricter information disclosure system,while Singapore has adopted a receptive attitude on the dual share structure and set sunset clauses and investor conditions to maintain the balance between super voting shares and common shares,thus protecting the rights and interests of small and medium shareholders.Finally,the above beneficial parts are summarized and analyzed,and some practices with reference value for China are analyzed.The fifth part puts forward some ideas and suggestions on the protection of the rights and interests of small and medium shareholders under the dual-share structure of listed companies based on the analysis of the previous parts.The first is to improve the regulations on the dual-share structure's medium and high voting shares,mainly restricting the issuance and voting multiples of high voting shares.The second is to improve the supporting system of the dual-share structure,establish a strict information disclosure system and perfect the independent director system,which is of great significance to the implementation of the dual-share structure and is also a powerful tool to protect the rights and interests of small and medium shareholders.The third is to increase administrative punishment for securities infringement.The fourth is to introduce the securities class action system.In the relatively mature securities market in the United States,the securities class action system is an important tool to protect small and medium shareholders.As long as one of them wins,the other shareholders can also get compensation.There is a similar joint litigation system in China,but it still needs to be improved under the dual-share structure.Finally,perfect the civil compensation mechanism and strengthen the connection mode of securities tort liability,and strive to protect the rights and interests of small and medium shareholders from multiple dimensions.