Research On Issues Of Occupying By Major Shareholders During Reorganization Program Of Listed Corporations

The reorganization has been existing more than four years since the Law of the People's Republic of China on Enterprise Bankruptcy (" bankruptcy law " for sort) was voted through by the 23rd meeting of the National People's Congress. Along with the issues arised and resolved constantly by a series of normalizative documents, the reorganization system which is under the favour by companies that are in trouble but still have potential vitality is becoming more perfect. The occupying by major shareholders is a part of factors that lead to operation problems and debts according to the practical situation of the 27 listed corporations that have been reorganizing or reorganized, as a result, how to dealing with the troubles caused by the occupying becomes a crucial link during the program of reorganization and depends the program's success to some extent.Combing the theories and practices, this paper firstly describes relevant concepts, ways of getting control power, behaviors of occupying and regulations as well; further elaborates the relationship between issues of occupying and the reorganization program based on comprehending to aforementioned items:the occupying by major shareholders not only is a crucial part of factors that lead to reorganization, but also brings about obstructions on each link of the program, form the positive correlation, the reorganization of listed corporations plays a vital role in solving issues of occupying and perfecting the mechanism of corporate governance; at last, this paper proposes a series of measure from the aspect of corporate governance to effectively restrain the issues of occupying.This paper gets the following conclusions:Firstly, occupying by major shareholders in a broad sense includes the action of misappropriation on funds and assets. Some shareholders usually resort to IPO (Initial Public Offering), spliting state-owned enterprises and BDL (Back Door Listing), and then profit from misappropriation on funds, connected transaction, illegal guarantee and any other ways.Secondly, the occupying by major shareholders makes a great damage to listed corporations. Constantly in this way, solvabilit lost and reasons of bankrupt emerged, that make the occupying by major shareholders becoming the major cause of getting reorganization.Thirdly, the issues of occupying by major shareholders block the reorganization program of listed corporations. On the view of positive correlation, the more serious issues of occupying are, the poorer and slower of solvabilit and reorganization program is; On the view of negative correlation, the sooner and better the reorganization program gets, the more valuable and perfect the listed corporation is.Fourthly, from the aspect of cases at the present time, solutions of occupying by major shareholders include directly satisfying by responsible shareholders, substituted paying off by local SASAC and some other new payment methods, such as assignment of the obligee's right, provision for bad debt and consolidation adjustment. These methods above have gained a good result in practice and palyed a role of example to succedent reorganized corporations. However, these methods above get risks on many aspects:execution of paying off by funds is difficult, debt program is easy to cause unfair connected transaction and can not solve the issues of illegal guarantee, assignment of the obligee's right may be revoked by court and give rise to new lawsuits.Fifthly, the imperfection of corporate governance mechanism is the main reason of occupying by major shareholders. The unbalance of ownership structure, function deficiency of organizations, immature of market mechanism and legislation mismanagement, all those factors together provide the conditions for the behaviours of occupying. Therefore, only if optimizing ownership structure, reforming oversight mechanisms, breeding nicer market mechanism, perfecting relevant regulations and enhancing the law enforcement, the issues of occupying by major shareholders could be restricted effectivlv.