A Research Of Corss-shareholding Legislation For Listed Companies From The Perspective Of Corporate Governance

With China's economic development, cross-shareholding is an increasingly common phenomenon. Howerver, cross-shareholding has its own pros and cons for the companies. Although it will bring certain benifits to the company, it exerts some impact on corporate governance and the entire marketat the same time.As a result, legislation is highly necessary.cross-shareholding is an intersection of a property capital and financial pervasion of the listed company. Stock investment brings substantial profits to the listed company and has a wealth of the enlargement of the effect. In a bull market, as listed company's assets achieved, it also means that it has other company's stock in appreciation. It will stimulate their price increases, thus increase in the interactive relationship, forming a bubble bull market mechanism. The direct consequences of cross-shareholding are that listed companies will flourish or wither at the same time.Cross-shareholding will increase market value of a listed company or decrease its market value. According to statistics, at the end of 2006, 178 listed company appear in the top 10 shareholder of 296 public company holding a total number of 15.4 billion shares. However, cross-shareholding has become new weathervane of the chinese market. From the facts we can say it is cross-shareholding that promote the bull market of 2007. We must face the temptation of great benefit and danger that cross-shareholding brings about. This essay is divided into three sections. The first chapter is about legal analysis of cross-shareholding, analyzing the legal framework, legal nature of cross-shareholding. then it states the necessity of legislation of cross-shareholding. The second section discusses company governs and the related theory. Cross-shareholding is a phenomenon violating the relevant principles and more prominent company governance rule. The third section discusses the current rule of law and analyzes the development of cross-shareholding in our country. Then it sets a pattern for our company, especially, it provides legislative proposal from the perspective of the listed companies.