System Perfection Of Voting Proxy In Chinese Listed Companies

The change of listed companies' control right has always been the focus of securities market supervision.The traditional voting proxy aims to facilitate the shareholders to exercise their voting rights,and takes minority shareholders as the main consignor,so it's rarely associated with the change of control right.But from the practice,in the voting proxy agreement disclosed by the listed companies,the controlling shareholders have already realized the separation of voting rights and stock rights through the long-term and irrevocable entrustment.It's similar to the Berle-Means Theorem,and can even further realize the disguised transfer of the company's control rights.Therefore,it's necessary to reexamine the voting proxy system,analyzing its role and problems in the regulatory background of listed companies in China.This paper will analyze problems and put forward relevant suggestions in four chapters.The first chapter introduces the substance and value of voting proxy in listed companies.According to the speciality of voting proxy,it can be divided into traditional voting proxy and new voting proxy.The former is usually short-term and revocable,fully respecting the will of the client,and the client usually belongs to minority shareholders;the latter is generally long-term and irrevocable,while the trustee is completely free to make decisions,and the client usually belongs to strong stock holders.The new type of voting proxy is related to the interests of many listed company shareholders,which can not be simply adjusted by the mandate relationship,and should be monitored through its essence.The reasons for major shareholders entrusting voting rights are not the same.It can be generally partitioned into the following types: first,transfering to trust institutions or other professionals to improve decision professionalism;second,there are restrictions on stock transfer,voting proxy can change control rights;third,protecting the rights of transferees during transitional period;fourth,guaranteeing in disguised form as a credit enhancement measure for loans;fifth,maintaining the control right unchanged to avoid reorganization audit;sixth,centralizing the control right of affiliate companies.The second type accounts for a large proportion,which uses voting proxy to achieve the change of control rights.Its essence is avoiding supervision of sales restriction,which needs to be regulated.The second chapter analyzes problems existing in the voting proxy on the basis of specific cases.From the effect of case study,there are four main problems in the voting proxy of listed companies in China: first,the separation of income right and voting power has led to a surge in moral hazard and an increase in agency costs;second,it violates provisions of free entrustment,and exchange interests in disguise;third,it evades the provisions of share sales restriction and reorganization;fourth,the client's violation of the irrevocable clause has led to instability on power of control and corporate governance deadlock.The third chapter analyzes the causes from the legal point,clearing up the deficiencies in the latest regulatory documents,so as to put forward the improvement ideas.At present,the regulation of voting proxy establish on the case review of CSRC and the stock exchange,lacking of targeted regulatory basis.The draft rules issued by Shanghai and Shenzhen Stock Exchange selectively solve some problems,such as disclosing the main terms of agreement,the authority,time limit and termination conditions of voting proxy.But there are still some deficiencies,like the inconsistency of standards,the incompleteness of provisions and the lack of force.In this regard,we should improve the system according to the following ideas: first of all,we should remedy defects of the rules,and strive to match rights and obligations.Due to differences of complexity and influence between traditional and new voting proxy,it should be regulated by different standards.Secondly,it is necessary to solve the problem of disunity and non authority,and make uniform provisions by the appropriate level of legal norms.Besides,we need to eliminate the differences between the rules of Shanghai and Shenzhen stock exchanges,respond to disputes and ensure implementation of the system.The last chapter constructs concrete system,and responds to questions of the second and third chapters.The core point is controlling long-term separation of income right and voting right.It's necessary to set the maximum time limit for two powers' separation,besides,it's important to set restrictions during the limit time.Both the compulsory provisions and the liability provisions are used to ensure that trustees exercise voting rights in accordance with the wishes of clients,and disguised voting rights transfer is prohibited from the source.In addition,prohibitions should be set for the illegal factors in the voting proxy,such as paid entrustment,restricted shares entrustment,irrevocable clauses,so as to weaken the illegal motivation of clients and trustees.Ultimately,we should improve information disclosure,take the investor's demand as the guide,the necessity and effectiveness of information as the premise,and disclose the main terms,risk factors and information changes of the agreement.