Research On The Validity Of Holding Shares On Behalf Of Listed Companies

“ Holding shares on behalf ” is not a new term,and there have been many disputes in recent years.The Judicial Interpretation III of the Company Law has provided a reference for the dealing with the issue of entrusted holding of shares of a limited company.But for a listed company,recognition of the validity of shareholding entrustment of shares is the precondition for solving the ownership of shares and the distribution of value-added benefits.The difficulties in the application of the law and the determination of the validity of shareholdings in listed companies are due to the imperfect rules for determining the validity of shareholdings.In judicial practice,the difference in the determination of the validity of entrusted shareholdingof a listed company by the courts under similar circumstances may not only lead to the wrong legal pre-judgment by market players,but also may damage the reliance interest of the parties to the contract.This article is entitled “Research on the Validity of Holding Shares on Behalf of Listed Companies”,which seeks a proper way of determination among the existing adjudication ideas and theoretical considerations,and expects to further improve the problems in determining the validity of shareholding entrustment of listed companies in China.The main points of this article are as follows:In the first chapter,through an empirical review of the existing rules of adjudication,further demonstrates that it is possible to reach opposite conclusions according to different adjudication ideas when the case is basically the same.At the same time,there is also a certain disagreement in the academic community on the validity of shareholding entrustment in listed companies,and it is the differences in judicial practice and academic that reveals the efforts made by judges and academics from different perspectives to try to make reasonable decisions.The differences between judicial practice and academic circles on the validity of shareholding entrustment of listed companies also provide the legal basis and considerations for finding the identification of the validity of shareholding entrustment of listed companies within the existing legal order framework,and thus develops the discussion in Chapters 2 and 3.The second chapter mainly analyze the judicial practice in determining the validity of shareholding entrustment in listed companies,and confirms that the clause of "public order and good morals" can be used as the basis for determining the effectiveness of entrusted holding.Firstly,by comparing the nature of a listed company and that of a limited company,it is argued that the determination of the validity of shareholding entrustment of a listed company in accordance with the Interpretation of the Company Law(III)is not applicable;secondly,it is analysed that whether the regulatory provisions will affect the validity,instead of the restrictions on the sources of judgment,but should focus on the regulatory provisions themselves.Finally,it is clarified that the "public order and morality" clause is the applicable legal basis for determining the validity of entrusted holding of shares of a listed company in the current order of the Civil Code.The third chapter mainly analyzes the factors that the academic circles will examine in determining the validity of entrusted holding of shares of a listed company,and confirms that the reasons for determination shall be taken as the factors for determining the validity of entrusted holding.Firstly,through the analysis of the existing views on the nature of nominee holding,including the theory of agency relationship,trust relationship and partnership relationship,it is proposed that the term "shareholding entrustment" is the nature,and there is no need to distinguish between them.Secondly,the analysis explains that even if a clear equity structure is the requirement for the company to be listed,from the perspective of going concern,the determination of the validity of entrusted holding of shares of listed companies should not be differentiated based on the different stages of conclusion of the entrusted holding agreement.Finally,the causes of shareholding are analysed in detail from the perspectives of "avoidance" and "non-avoidance",and it is proposed that it shall be taken as a factor for determining the validity of the entrusted holding agreement.The fourth chapter mainly provides some superficial suggestions for determining the validity of entrusted holding of shares of a listed company.In the first section of this chapter,the specific application of the clause on "Public Order and Good Morals",and for this purpose,develops a method for determining the specific application of the clause on "public order and good morals" with "weighing of interests" as the core and using the "principle of proportion".The second section of this chapter also points out that penetrative regulation shall be exercised prudently in judicial review,and that while the stability of the financial market is ensured,the autonomy of both parties shall be respected.In addition,the last section of this chapter proposes a vision for recognizing the validity of entrusted holding of shares of listed companies by means of adequate information disclosure in China,by drawing parallels with overseas regulations on proxy holdings of shares in listed companies.