A Study On Legal Problems With Debt-to-Equity Of Our Country's AMC

The state-owned commercial banks have been charged with a lot of policy businesses in the process of our economic transformation, and so incurred a great deal of bad asserts. This seriously hinders the function of banks, threatens the safety of whole financial system. The bad asserts and high debt rate have been the hidden trouble to our economy's safe and high-speed development.Four Assert Management Corporations (brief named as AMC) which dispose of the bad asserts of four state-owned banks founded in 1999 on the basis of the foreign experience of disposing of bad asserts in order to guard against financial risk, reduce the proportion of the bad loan and help state-owned enterprise. Debt-to-equity is the key measure in disposing of bad asserts.Debt-to-equity refers to the action that the debter transfers the debt to the investment to the debtor according to law. It can be cataloged into two kinds according as the action is led by market or by government: one is commercial debt-to-equity and the other is policy one. Nowadays what we have taken is mainly the latter one. It refers to the AMC as the investment subject transfers the debt right stripped from the state-owned banks to the stock right of state-owned enterprise. And the relationship between AMC and the enterprise changes from the debtor-to-debter relationship to stockholder-to-enterprise relationship.The effective operation of AMC can't go without the prop of law. But the laws that debt-to-equity based on are inconsistent with other laws. The inconsistencies lie in following aspects: first, the absence of corresponding laws; second, the legal nature is obscure; third, the legal obstacle to debt-to-equity, the last one, the inequality of debt-to-equity is against the basic principle of civil law.This article brings forward the following improving measures to dissolving the problems: firstly, transform the AMC into investment banks or financial holding corporation, change the operate regime of AMC, set up the modern corporate governance; secondly, perfect the capital market, broaden the exiting avenues for the stocks; thirdly, perfect the legal system, stipulating the following rules: the nature, legal status and its foundation conditions of AMC; the conditions for other investment subject; the contribution kinds, procedure and legal liabilities of defect contribution in the process of debt-to-equity; the effectiveness of mortgage article; exit of stocks and so on. We can improve the outside environment and coordinate the conflict between the debt-to-equity and legal system.