Research On The Protection Of Minority Shareholders Under Dual-class Structure

The AB-share design of the dual equity structure can meet the diversified investment preferences of long-term and short-term investors in the company,and stable control helps the founders and executives to devote themselves to the work and realize the long-term value of the company,while also providing a new way to alleviate the asymmetry of investment information.However,the absolutization of control can have adverse effect: the general meeting of shareholders is effectively a meeting of exclusive controlling shareholders,and small and medium-sized shareholders are gradually reduced to "rubber stamps",undermining the principles of shareholder equality and democracy.Therefore,the dual equity structure is a complex contradiction,innovation enterprises in different countries and regions actively embrace the dual equity structure,but also in legislation and supervision.In the introduction of the dual equity structure,China’s science and technology board has also carried out a careful system design for the protection of the interests of small and medium-sized shareholders,but through its actual operation,such system design still has shortcomings,such as the special voting rights holder qualification setting unreasonable,information disclosure to be perfected,not formed a clear regulatory body and so on.Therefore,to construct a complete set of small and minority shareholders protection mechanism,in order to balance its advantages and disadvantages,to ensure the stable development of the dual equity structure in China.This paper discusses the dual equity structure by case study,taking Xiaomi Group as example.Through analysis,it explains the meaning and properties of dual-class structure,analyzes its prevalent reasons and impact on the interests of minority shareholders.Then use the comparative analysis to compare the supervision attitude and measures of US,Singapore,Japan and other countries.Building the minority shareholders’ protection mechanism.This includes improving access qualification restrictions and setting up special control shareholder supervision bodies,perfecting the exit mechanism for special voting rights,adopting term-type,performance-type and letter-based sunset clauses,and establishing a differentiated information disclosure system for dual equity structures.Judicial relief should improve the system of securities demonstration litigation,optimize the procedure of notification of litigation to parties in parallel cases,support litigation against demonstration litigation and public welfare institutions,improve the mechanism of civil compensation for securities infringement,determine the calculation method of civil damages,improve the existing mechanism of advance compensation,and clarify the status of the main body of compensation for dual equity structure companies.