The Protection Of Minority Shareholders' Interests

Corporate takeover as an important part of merger happened in China in 1993, that Shenzhen Boan Company took over Shanghai Yanzhong Company through Shanghai Security Exchange. From then on, affairs of takeover happened in China frequently. At the same time, Legislative Branch tries best to normalize the actions of corporate takeover. But in regard to current and practice, there are still a lot of problems here, and the most Concentrated is the benefits of the minority shareholders, that can not get fully protected.Minority shareholders, as the important power of stock market, are headspring and foundation that listed companies depend on to exist, again the stock market depends on to develop. If the benefits of the minority shareholders can not get guarantee,the enthusiasm of invest will suffer defeat. Finally, it is difficult to develop the stock market. Owning to this, author writes this article, research for how to protect the minority shareholders.In this paper, I utilize positive analysis and normative analysis. Besides, the economic methods are also important tools. In order to find breakthrough to problems of protecting the interests of minority shareholders, this paper analyzes the economic causes of the problems, and describes the inevitability of participants'conflict of interest, and the reasons for conflict of interest. It's also a clue and breakthrough of minority shareholders protecting.There are four parts of this paper. The first part describes the concepts of Takeover of Listed Companies and other related concept. The second part uses the economic methods to analyze the takeover involved in a conflict of interest exists between the parties, and that conflicts of interest can not be eliminated, only by way of rules to guard against. In addition, Part II also analyzes the reason why minority shareholders'interests being damages, and how other parties undermine the advantages of the use of (opportunities), including information asymmetry, moral hazard and adverse selection and so on. The third section describes how takeover of listed companies damage the interests of minority shareholders when the specific performance in detail. The forth part expands upon the regulations of listed companies takeover in China, including the purchaser regulation, controlling shareholder regulation, the intermediary regulation, information disclosure regulation and so on. This paper points out that these legal norms are inadequacies in the interests of protection of minority shareholders. Part V uses the theory of information asymmetry, moral hazard and adverse selection, proposed acquisition of listed companies to improve the legal system of the specific legal regime.