The Research About Unfair Related Party Transactions In The Pattern Of Targeted Placements

With the development of social market economy and capital market in China,mergers and acquisitions between different enterprises have gradually become one of distinctive features in the process of market economy.From an economic standpoint,economics of scale and synergistic effect derived from M&A actually will benefit both the development of market and enterprises.But in term of law,such measures may bring unequivalence of rights and obligations among commercial subjects.The most common phenomenon is that those strong stock holders do harm to interests of minority shareholders through unfair related party transactions in the process of M&A.Targeted placement may be the hidden way which in fact damage the interests of minority shareholders.Also due to the existence of related party transactions,the risk of damage to the minority shareholders will be greater and deeper.Series corresponding rules have been made to solving issues of related party transactions featuring duality and recessivation.The set of rules and regulations is aimed at standardizing the company voting system,information disclosure system,issue and pricing system and other systems,but supervision failure often occurs in the operational process,This paper tries to analyze related reasons based on following theories,such as theories focusing on interests conflicts,information as metric theory and the fair determination theory.Also combining with the characteristics of targeted placement,this paper draw a conclusion about how above reasons can be showed in the targeted placement.Besides,through analyzing that why unfair related party transactions occur nowadays,we propose sets of measures which can help to establish fiduciary duties of controlling shareholders and improve information disclosure systems at macro level.From the micro perspective,we come up with modified pricing systems to reduce the possibility and increase the cost of manipulating stock prices based on the features of targeted placement.We also advocate to improve internal control systems,and raise the cost of manipulation of the board of directors and shareholders.In addition,this paper makes suggestions about profit commitment systems of related shareholders,which can lower the risks of benefit losts caused by related party transaction.Based on the above study,this paper focuses on the research about unfair related party transactions in the pattern of targeted placements.The main framework is as follows:proposing issues-legal definition of subjects-analysis of causes-solving problems.In part one,we try to raise the question of unfair related transactions in the targeted placement in real estate sector using a M&A case in Ningbo.In part two,we first give concepts of related transactions,then clarify research objects in terms of law which can pave below.In part three,we analyze the hidden reasons that why unfair related transactions occur in the M&A pattern,just from two perspectives both general reasons and special performances.In part four,on base of the reason analysis and framework above,we improvise common solutions as well as specific methods according to the characteristics of targeted placements and M&A.