Research On The Validation Of Valuation Adjustment Clauses In Private Equity Investment

As China’s private equity investment market has grown stronger,there have been more and more cases in which investment and financing parties have used valuation adjustment clauses.As a new type of financial innovation and financial tool,the valuation adjustment clause has played an active role in alleviating the information asymmetry between the parties to the transaction,shelving the corporate value dispute,reducing transaction information costs,resolving investment risks,and promoting effective transaction.At the same time,the differences in the legal effects of valuation adjustment clauses have entered the vision of the academic and practical field with the judgments of “Haifu Case” and “Ningxia Tairi Case”.This article intends to address the common problems that are reflected in practice and seek theoretically feasible solutions so as to benefit the judicial practice.The article starts from the connotation of the valuation adjustment mechanism and develops characteristics in its different stages,and then analyzes the economic theory generated by the valuation adjustment mechanism in private equity investment,so as to sort out and demonstrate its legal attributes and legal elements.Through focusing on the analysis of effectiveness disputes in the different subject judgments of the valuation adjustment mechanism,a comparison is made from the three aspects of the application of law,the concept of judgment,and the value orientation.Based on this,it combines the current legal system of civil and commercial affairs,classifies and resolves the path of judicial identification of the valuation adjustment mechanism,and finally arrives at the consideration of the factors that determine the effectiveness of judicial action.The author believes that the valuation adjustment clause is,by its very nature,a kind of contractual arrangement for the investor to adjust the valuation of the target company,which is fundamentally different from the gambling that has strong subjectivity and randomness.As far as its properties are concerned,it has systemic consistency with options,and is an unnamed contract with options as the main content.As far as its effectiveness is concerned,different referees in practice will make different decisions on different types of terms based on different ideas and values.In general,as long as there is no fraudulent and coercive means to conclude the content which does not violate the prohibitions imposed by the laws of our country,harm the social and economic order and infringe the interests of the state,the collective and others,there should be no substantive obstacles to implementation in compliance of the relevant laws and regulations in our country.The invalidity of some clauses needs to be perfected through rational norms.Protecting the public interest,facilitating transactions,and respecting autonomy of the meaning should be our value judgment on the valuation adjustment mechanism.