Fiduciary Duty Of Controlling Shareholder Of Target Company In Anti-takeover Measures

With the development of market economy and reform policy in China, the number of listed companies grows fast, and they expands with their share structure varying continuously. The growing numbers of hostile takeovers and the resulting anti-takeovers by target companies have exerted a profound influence on capital market, which needs the establishment and perfect of relevant legal system. In this regard, perfect legislation should be made so as to regulate the fiduciary duty of controlling shareholder of target company in anti-takeover measures. This dissertation will, based upon deep research on the fiduciary duty of controlling shareholder of target company, focus on some relevant key problems existing in the field of anti-takeover by the method of comparison and legal analysis on relevant provisions of western developed countries, and will bring forward some advice on legislation for our country in the hope that these advice can be of help to the legislation of our country in the future.This dissertation falls into three chapters. Chapter I focuses on the value of anti-takeover by introducing two opposite points of view. Besides, the necessity of regulating anti-takeover measures will follow as a personal point of the author. After that is the topic of the deciding rights to take anti-takeover measures and the anti-takeover measures. By comparison and legal analysis between two methods abroad, the author tells us his own point of view. Lastly, the details of various kinds of anti-takeover measures follows, which can be divided into two categories, i.e., pre-measures and post-measures.Chapter II talks about the theories on the fiduciary duty of controlling shareholder of target company in anti-takeover measures and the details thereof. This Chapter first focuses on the scope of the controlling shareholder of target company with contents regarding the definition and attributes of the fiduciary duty of controlling shareholder of target company in anti-takeover measures, including the relationship between the fiduciary duty of controlling shareholder of target company and anti-takeover measure. After that, the theoretical basis of the fiduciary duty of controlling shareholder of target company in anti-takeover measures follows. Lastly, the details duties of the fiduciary duty of controlling shareholder of target company in anti-takeover measures are, based upon the foregoing, analyzed which includes duty of care, duty of reasonable investigation, duty of information disclosure and duty of loyalty.Chapter III discusses on the regulations on the fiduciary duty of controlling shareholder of target company in anti-takeover measures, which can be divided into two categories, i.e., precaution measures and relief measures. Precaution measures include cumulative voting, elimination of voting power and share repurchase. Relief measures include direct action, derivative action and the revoke and invalidity of resolutions by congress of shareholders. Lastly, the author gives some constructive advice for the legislation of China based upon the analysis on existing regulations and actual conditions.