Supervision Of Related Transactions In Mergers,Acquisitions And Restructuring Of Listed Company

With the development and mature of our country's capital market,accompanying with the issue of the Sate Council and CSRC's documents,the M&A are growing strong rapidly and has acquire a great achievement.But for the reason that state-owned enterprises were reorganized and went public and the controlling shareholder have the absolute proportion of private enterprise stock,the related merger and acquisition which the listed company buy asset from the related party become a characteristic phenomenon in China.The over appraisal,high premium,optimistic commitment result the significant goodwill decrease in value,which attracted great attention of the society.All that mentioned above are inseparable with the lack of the supervisory to the Related party transactions.The situation of complete circulation arises the new challenge.Therefore,this paper analyzes the identification of related parties and related transactions in different legal documents based on the combination of foreign laws,and summarizes the advantages and disadvantages of the identification of related parties and related transactions in China,and concludes that the nature of related transactions lies in the conflict of interest between related parties,companies and other investors due to "principal-agent".As an inevitable choice to overcome negative externalities and reduce transaction costs,M&A has its own rationality in the economic sense.The related party transactions in M&A and reorganization are inevitable because of large shareholders' hollowing out or support,synergy effect,reduction of transaction cost,insufficiency of legal documents,and changeable regulatory attitude.In particular,they choose to purchase assets from large shareholders.Due to their convenience in operation and availability of substantive standards,they have become the inevitable choice among several refinancing tools.In terms of the experience of overseas regulation,this paper introduces the principles of overseas regulation of connected transactions,summarizes the current legislative system of China's connected transactions regulation,and makes a consideration on the deficiencies.Although a relatively complete legislative system has been formed,The regulation of joint transaction is too simple in the basic law.In the documents issued by the departments issued by the CSRC,most of them are the principle of listed companies,lacking the right protection mechanism for listed companies and small and medium shareholders.In case analysis,this paper analyzes the bankruptcy through reorganization of Yinyi Co.,Ltd.,and identifies the problems in the supervision of related transactions mentioned above.The proposes some improvement suggestions,and analyzes the causes,the nature and the supervision loopholes of related transactions.For the above problems,this paper introduces the Deep-Rock Doctrine and the fiduciary duty of controlling shareholders to protect the small shareholders.Moreover,the targeted information disclosure system is strengthened to make the report of listed companies more valuable and the system of shareholders' meeting is improved to get rid of the control of shareholders' meeting from controlling shareholders.The improvement of the selection and remuneration system of independent directors is to make them truly independent.The paper establish the internal compensation mechanism of securities intermediary institutions and strengthen the punishment on securities intermediary institutions,so that the intermediary institutions can be more responsible for the duty of diligence and prudence.Finally,the paper advise to strength the commitment performance and restrict it for the sake of the small shareholders.