The Research On The Legalimacy And Rationality Of The Anti-takeover Provisions In The Articles Of Association Of Listed Companies

A common method to defend hostile takeover for listed companies is to adopt anti-takeover provisions in company charter.With the frequency of hostile takeover increasing,it is more often to see listed companies using anti-takeover provisions.Frequently used anti-takeover provisions are classified into two types: firstly,provisions limiting the rights of shareholders;secondly,provisions regulating the board of directors.The first type is further classified into staggered board provision,golden parachute provision,and provision in respect of the qualification of directors etc.The second type is further classified into supermajority provision and provision limiting the nomination of directors.After the "Bao vs.Wan fight",several listed companies in China attempted to adopt anti-takeover provision in their company charter,and thus received letter of concern from Stock Exchange Commission regarding the legitimacy of the provisions.However,due to the lack of sufficient laws and regulations,cases and academic theory,it is difficult for the supervisory authority to determine the legitimacy and rationality of the anti-takeover provision.The listed company can only be warned by issuing a letter of inquiry.This paper attempts to judge the legitimacy of the above common anti-acquisition clauses by analyzing the law and case,and analyze its rationality through balance of interests.