| In order to attract investment,companies usually sign a valuation adjustment mechanism(VAM)with the investor,in which the relevant exit mechanism is agreed,most of which share repurchase agreement.Through the combing of relevant judicial cases in the Laws&Regulations Database-Chinalawinfo,it is found that share repurchase agreement between the investor and the original shareholder of the target company as the main body of the agreement has been generally recognized in China’s judicial practice.However,on the question whether the target company can conduct share repurchase or that,there will be a situation of "different judgments in the same case".It includes most courts basically denied the share repurchase of the target company,but the arbitral tribunal is more open and usually supports the investor’s appeal and requires the target company to fulfill the share repurchase obligation.Therefore,whether the target company can carry out share repurchase has become the focus of judicial practice in China.This paper begins with the three levels of legislation,justice and supervision,analyzed the status quo and summed up the controversial focus of share repurchase in the VAM.Secondly,by sorting out the relevant provisions and treatment methods of the company’s share repurchase in the foreign Company Law,the relevant enlightenment of perfecting the share repurchase in the Company Law of China is obtained.Finally,it puts forward relevant suggestions on perfecting China’s share repurchase in the VAM,such as setting up preferred stocks in the Company Law,improving the information disclosure system,and changing the judicial thinking in judicial practice.In addition,some suggestions for risk prevention in share repurchase have also been proposed for investors and target companies.This paper hopes to provide further support for the application and development of share repurchase agreements in China by studying the legal issues of share repurchase in the VAM. |
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