A Study On The Forced Squeeze-out System Of The Acquirer's Remaining Shares

China's "Securities Law" granted the compulsory selling rights of the remaining shareholders,but did not grant the buyer a mandatory right to purchase.In the case of full control of the target company,the acquirer often faces the inability to find the remaining shareholders after acquiring the majority of the capital of the target company,and the remaining shareholders are reluctant to sell their shares.In the current legal system environment,the acquirer usually has to spend a huge amount of money to initiate absorption and merger to solve the problem about the remaining litigation.The proposal of the concept “establishing a system of mandatory share extrusion in China” has caused controversy among scholars.Among them,the legitimacy of the mandatory crowding out of the remaining shares is particularly special.Those who disagreed believed that the purchaser forced the acquisition of shares that the remaining shareholders were unwilling to sell by paying money,which not only violated the principle of freedom and equality,but also caused the remaining shareholders to suffer non-interest and broke the balance of interests among shareholders.It will even cause damage to the securities market.Under the mandatory share extrusion system,the crowded shareholders are vulnerable to loss of profits.Even if the remaining shareholders are excluded from the company and the compensation price is higher than the market price,the remaining shareholders will suffer some non-interest.For example,the squeezed shareholder must bear the tax;the squeezed shareholder must bear the cost of receiving the consideration for reinvestment;if the information conveyed by the market does not reflect the market price of the share,the real investment value of the squeezed shareholder Will be partially plundered.The free and fair trading of investors depends on the level playing field in the securities market.If the main body of the securities market is differentially treated because of its economic strength and the amount of investment,allowing the acquirer to deprive the remaining shareholders of will by crowding out and crowding them out of the company is undoubtedly a breach of the fair competition environment in the securities market.For the good operation of the securities market,each investor's independent judgment must be respected.Even if the compensation price paid by the remaining shareholders is excluded from the market price,it is a damage to the equilibrium of the securities market.At present,China has not yet formed a multi-level capital market system.The scarcity of shell resources has led to a low rate of delisting system,especially the active delisting system.The “deposition” of the delisting system has caused the progress of the related system construction to be relatively slow,and even a large part is still in the blank stage.It can be said that in such a market environment,the privatization delisting system of listed companies in China is still at a rather immature stage.Therefore,in order to improve the privatization delisting system,it is necessary to first promote systemic reforms at the institutional level,formulate targeted privatization delisting rules,and actively introduce supporting legal measures.This paper analyzes the current situation of forced extrusion of the remaining shares.This paper considers that the forced extrusion of the remaining shares refers to the case where the listed company buys back the shares of the company or the acquirer acquires the shares of the target company,forming the total capital or stock of the company or the target company.Distribution structure.If the company withdraws from the list according to the quotation conditions,the company or the acquirer has the right to request the shareholders of the remaining shares to sell the shares,and the remaining shareholders also have the right to request the company or the company acquirer to acquire the shares.The research steps of this paper are as follows: Firstly,through literature research methods,according to the research purpose and practical value of this document,through collecting books,literature and other materials,to fully and correctly understand the problems to be studied.On the basis of a large amount of reading materials,it has formed its own theoretical viewpoints and research results.Second,compare research methods.In comparing the institutional concepts of the remaining participation systems in China and other countries or regions,the specific provisions and actual operations absorb the advantages of other countries or regions outside the region to make up for the shortcomings of our legal system.Therefore,this paper proposes that in the specific system design of the mandatory stock extrusion,on the one hand,through the administrative guidance,administrative examination and approval and strict information disclosure system,the forced extruding right of the acquirer is exercised in a fair and open environment.It may reduce the losses of the remaining shareholders.On the other hand,through the improvement of judicial remedies,the court provides more comprehensive judicial remedies for the remaining shareholders.If the remaining shareholders are not satisfied with the price of the extrusion,they can submit an application price assessment to the court.The court will evaluate the purchase price in a certain way to determine whether the consideration is fair,thus ensuring the relative fairness of the purchase price.On the whole,if China introduces the system of forced-excession of surplus shares,it can be said that it gives the majority shareholder and minority shareholder the right to choose to abandon the rights of both parties,and seeks a reasonable distribution of the interests of the major shareholders and minority shareholders of the listed company.balance point.This paper believes that China has not yet formed a multi-level capital market system.The scarcity of empty shell resources has led to a decrease in the delisting rate,especially the decline in the active delisting rate.The “deposition” of the delisting system has led to a relatively slow progress in the construction of related systems,and even a large part is still in a blank stage.It can be said that in such a market environment,the privatization delisting system of listed companies in China is still at an immature stage.Therefore,in order to improve the privatization delisting system,it is necessary to first promote institutional reform at the institutional level,formulate targeted privatization delisting rules,and actively adopt supporting legal measures.As far as the current legal system is concerned,the rules applicable to privatization transactions in China are usually scattered among relevant laws and regulations,such as the Securities Law,the Company Law,the Measures for the Administration of the Acquisition of Listed Companies,and the Rules for the Listing of Stock Exchanges.And the above-mentioned "Delisting Opinions".There is still no scientific norm and a relatively complete system of rules.However,privatized M&A transactions are fundamentally different from ordinary M&A transactions.The consequences of strong crowding and active delisting have made privatization transactions very special.Therefore,only by forming a unified normative system and then implementing multi-level legislation,the privatization and delisting system of listed companies can operate better,thus ensuring the smooth progress of privatization decisions of listed companies.Small and medium-sized investors are not affected by the infringement of legitimate rights and interests by strong controlling shareholders,and they strike a balance between efficiency and fairness.To establish a unified rules system,we must grasp the important proposition of protecting the rights and interests of minority shareholders.The situation of privatization cannot be changed.Therefore,in the legislation,we must pay attention to the minority shareholders' voice,strengthen the participation of small and medium-sized shareholders in the process of privatization,and compensate for the weak position of small and medium shareholders through system design.Therefore,it can be understood that no matter how the system is designed,protecting the legitimate rights and interests of small and medium investors is the basic principle.In addition,the privatization delisting system should have multiple levels of legislation.From the perspective of extraterritorial experience,the laws and regulations that listed companies must abide by in the process of privatization delisting are diverse and intertwined,which is very complicated.However,despite these laws and regulations,these laws and regulations are not confusing,they have a close relationship,and they have different connections.In addition,the law will apply differently for different privatization approaches.Often,there are specific regulations governing different types of privatization transactions.The information disclosure system is the basic embodiment of the basic principles of the "open,fair and just" securities law.It exists in the whole process of securities issuance and trading,and runs through the beginning and end of securities supervision and management.The authenticity,accuracy,completeness,timeliness and formal standardization of information disclosure content,accessibility and ability have become the consistent code of conduct for the national information disclosure legal system.In the privatization delisting system of listed companies,information disclosure rules occupy a crucial position.In order to improve the privatization delisting system,the information disclosure system is a top priority.In terms of perfecting the information disclosure rules in the privatization and delisting of listed companies in China,the author believes that we can start from the following aspects: First,increase the object of information disclosure.China's "Securities Law" and "Administrative Measures for the Acquisition of Listed Companies" have made corresponding provisions on the information disclosure of the listed companies.According to the above provisions,in the process of acquiring a listed company,China's law only requires the acquirer and its unanimous participants to undertake information disclosure obligations.However,from the actual situation,such a scope of the main body obviously cannot meet the needs of the privatization of listed companies.The author believes that based on the particularity of privatization transactions,the entity that needs to disclose information in this process should include not only the controlling shareholder and its affiliates that initiated the privatization transaction,but also the management and existing privatization of the target company.Privatization transactions.Director of Conflict of Interest.All of the above-mentioned personnel are likely to grasp the important information of listed companies and use their own information advantages to mislead small and medium-sized shareholders to seek illegitimate interests.Therefore,in the subject of information disclosure of privatization delisting,the above-mentioned personnel should be added and their information disclosure responsibilities should be clarified.The author believes that in the process of privatization transactions,China can learn from the extraterritorial independent committee system and establish an independent negotiating committee mechanism,that is,listed companies should provide assistance in the process of privatization.Privatization delisting.Small and medium-sized shareholders have established highly independent negotiating bodies to help small and medium-sized shareholders negotiate with counterparties.The steering body is established outside the board of directors,similar to an independent committee.As a spokesperson for minority shareholders in privatization transactions,it will be responsible for reviewing privatization transactions,including hiring privatization transactions.Third-party intermediaries are fair to the transaction.After analysis,whether small and medium shareholders should accept the offer price.In order to prevent the Independent Negotiating Committee from being controlled by the controlling shareholder,the legislation also needs to continue to improve certain rules in order to select independent negotiating members,perform their duties and supervise their responsibilities committee.For example,strictly regulate the fiduciary duties and loyalty obligations of the members of the independent negotiating committee,improve the shareholder representative litigation system,establish an avoidance system for relevant shareholders,establish a more stringent compensation and compensation system.