Study On The Obstacles And Paths To The Implementation Of Stock Repurchase Betting Agreements

The equity buy-back type gambling agreement refers to the agreement between the investor and the financing party.If the financing party fails to complete the objectives agreed in the gambling agreement(mainly taking listing as the gambling condition),the financing party needs to repurchase the shares in accordance with the price,time limit and agreed manner agreed in the agreement.After the repurchase is completed,the investor loses its shareholder status and exits the target company.The performance of the equity buy-back type gambling agreement is the focus of the current judicial practice.After the promulgation of the Minutes of the National Court Civil and Commercial Trial Work Conference of the Supreme People’s Court on November 4,2019,the capital reduction procedure was taken as the precondition for the performance of the gambling agreement.Its original purpose was to balance the interests of the investor,the target company and the creditor.In practice,it caused the difficulty of shareholders’ withdrawal and the lack of restrictions on the source of repurchase funds,It is difficult to implement the capital reduction procedure and lack of corresponding relief rules.Because of the above problems,when the target company fails to achieve the agreed goals,it usually protects the interests of shareholders at the expense of the investor’s interests,which is difficult to effectively protect the investor’s interests.In this regard,this paper suggests that the debonding of repurchase and capital reduction procedures can be set up to properly position the capital reduction procedures by referring to foreign laws and classic cases;We will improve the review criteria for share repurchase,build a performability standard that is consistent with China’s actual situation,introduce restrictions on the source of repurchase funds,clarify the way of responsibility and other measures to resolve the problem of difficulty in performing the share repurchase type of gambling agreement,in order to better balance the interests of investors,target companies and creditors,and further stimulate business vitality.