The Dilemma And Way Out Of The Application Of Share Repurchase System In China

Almost all countries in the early stage strictly restricted the share repurchase,mainly because that the legal capital system do not allow share repurchase returned capital to shareholders,which harmed the interests of creditors.Later,the positive value of share repurchase,such as optimizing capital structure and flexible dividend distribution,was gradually recognized and accepted by many countries,which gradually changed the legislative attitude of it.In general,all countries have relaxed the control of share repurchase,but still retain some restrictions.China's legislation on the share repurchase has also experienced the evolution from strict to slow.In 1993,the company law of China only allowed share repurchase under the circumstances of capital reduction and merger,which reflected for China's position of "prohibition in principle,exception allowed".In 2005,the company law was amended to expand the situation of share repurchase,and share repurchase was still prohibited in principle.Until the law was amended in 2018,China increased the situation of share repurchase again,and further relaxed the restriction on companies to acquire their own shares,which made the legislative attitude of China's principle prohibition become vague.However,since the emergence of the company share repurchase system,there has been a heated debate in Chinese academic circles on the issue of restricting or releasing the company share repurchase,which has even affected the thinking of future revision.The different academic viewpoints put forward by Chinese scholars are essentially the result of different choices between the legislative mode of civil law countries and the legislative mode of the United States.To insist on the restriction of the subject matter of the company's share repurchase is actually to insist on the position of "prohibition in principle and permission for exception" of the civil law countries,while to advocate the complete liberalization of the subject matter of the company's share repurchase is to recognize the position of "permission in principle and prohibition for exception" of the United States.At the same time,China's share repurchase system also has many problems in practice,which is manifested in the fact that the repurchase situation stipulated by the law cannot fully meet the needs of real life,and the guiding role of the law on judicial practice is limited.However,this problem of disconnection between legislation and practice is not a recent occurrence,but is caused by the dual nature of share repurchase,the immature legislative technology,and China's national conditions.So the problem of the company share repurchase system in our country is not through the repair method part let go of repurchase reason can solve,as long as not to stand in legislation in our country into the principle of "licensing" mode,completely let go of share repurchase for restrictions on the company,legal repurchase situation is difficult to meet the demand of the real phenomenon will always exist.Along with the development of capital markets,in the real world will produce more different companies need to share repurchase,the law is not completely cover.Such a legislative background leads to the fact that in practice,there have been judges in our country who have already gone beyond the scope of article 142 of the company law to judge the buyback cases,and essentially broadened the reasons of share repurchase,so that the judgment result does not violate fairness and justice.In order to demonstrate whether it is related to the wrong choice of China's legislative mode that the company share repurchase system is controversial in the academic circle and has many problems in practice.It is necessary to make a comparative study of the different legislative modes and judicial practices of foreign countries,so as to better comment on the views of scholars,find a way to improve the share repurchase system in China,and find a solution to the problems existing in judicial practice.At present,countries with restrictive legislation mode,mainly Germany and Japan,have greatly relaxed restrictions on the causes of share repurchase,and begun to attach importance to the use of financial regulation means.On the other hand,the United States has established the share repurchase system by means of financial regulation,combined with the perfect company law system and the long judicial experience,on the basis of no restrictions on the repurchase events.However,the comparison between the two legislative models shows that it is not possible to get a better result,and it is difficult to completely switch to the American model,because China has not yet established a developed company system and social credit system supporting financial regulation means.It is also impossible to draw close to the institutions of the European Union,Germany and Japan,because their internal rules re still inconsistent.Whether the United States or civil law countries,its core is to find a balance between share repurchase restrictions and freedom.At present,aiming at share repurchase,China has accumulated decades of judicial experience,so the feasible approach is still based on the basis of China's judicial practice and legislation,to find a method in line with China's national conditions.At the same time,in the practice of other countries and regions that implement restrictive legislation,some judges regard legal interpretation as a solution to the problem that the limitation of share repurchase causes of companies cannot meet the practical needs.Therefore,in the context of the current lack of norms,China must also shift its focus to the application of law and get rid of the predicament of article 142 of the company law in the judicial application.For this reason,the court needs a set of applicable judicial standards when hearing the case of company share repurchase.Firstly,the court should redefine the protection standard of creditors' interests,and should not ossify the protection of creditors' interests from the standpoint of legal capital system.The court should stick to the standards of solvency and fair pricing.Secondly,after examination,the court finds that when the company meets the protection standard for the interests of creditors,it can expand the repurchase cause by means of legal interpretation and loophole filling to make the repurchase contract effective.The specific interpretation path is as follows:the employee retirement situation is interpreted as the employee stock ownership plan;Expand the interpretation of "right of repurchase request of dissenting shareholders" to include the right of withdrawal request of shareholders under specific circumstances;The analogy of"capital reduction" is applicable,and it will be legalized to offset debts with shares,bet agreement and free acquisition of the company;To define the limits of purposeful expansion;Thirdly,in the case of share repurchase under special circumstances,the judgment should not be made directly in the form of logic,and the focus should be shifted to the security of the transaction.Finally,as for the protection of the interests of shareholders and creditors and the subject liability regulation in share repurchase which has not been stipulated in the company law,the court should pay attention to the benefit relief of all parties when making judgment.