Research On The Legal Problems Of Share Repurchase Price Evaluation

The appraisal rights originated from the USA, and then many countries set the rights to protect the dissent minority shareholders who are against making the major changes under the rule of capital-majority decision. In order to respect the majorities’decision and give the minorities the right to withdraw from the company as well as recoup their investments under fair conditions, Article75and143of Corporation Law stipulate the appraisal rights. However, there exist flaws in the appraisal rights. The appraisal criteria of repurchase price and judicial evaluation procedures are not clear, which makes this system fail to achieve its proper value during the implementation and operation.The confirmation of stock repurchase price is the core of appraisal rights and the key for the minorities to exit the company. Among these, judicial evaluation is the final protection for the appraisal rights which the minorities can use to seek for relief. This paper focuses on legal issues of price assessment in appraisal rights. Through comparing the legislation and cases of appraisal rights in foreign countries and referring to the judicial evaluation procedures of Civil Procedure Law on the basis of the status quo of China’s legislature, the paper aims to put forward countermeasures and suggestions for the perfection of judicial evaluation. The body consists of four parts:Chapter1summarizes the legal issues of price assessment in the appraisal rights. Combining with the development of the appraisal rights, this chapter clarifies the definition as well as the nature of the repurchase price. Also, it discusses the legal value of the appraisal rights and the shortage of our system.Chapter2analyses the principles of price assessment. The appraisal rights are designed to protect the interests of minority shareholders. These legal principles should guide the evaluation and confirmation of the stock repurchase price and be consistent with the legislative intention.Chapter3interprets the appraisal criteria. It clarifies the definition and importance of fair price. Then by comparison with the reference of foreign legislation, it puts forward specific legislative proposals from four aspects:the scope of shareholders; the objections; base date of assets evaluation and price calculation method. Chapter4disserts the judicial evaluation of repurchase price. This chapter sorts out the specific procedures of judicial assessment in the light of foreign legislation and jurisprudence and proposes to establish pre-paid system with reference to the Civil Procedure Law.