On The Definition Of Fairness Of Related Transactions Of Public Companies In China

At the end of the 2015,CSRC issued amended Measures for the Administration of Initial Public Offering and Listing of Stocks、Measures for the Administration of the Initial Public Offerings and Listing of Stocks on Chi Next and Standards for the Contents and Formats of Information Disclosure by Companies Offering Securities to the Public No.1——Prospectus.The amendments mean an issuer will be required only to disclose information on the companies’ independence strictly according to the facts,and leave the judgment on companies’ independence and from which the influences it has on the investment value to the market materially.As a vital component in judgment of companies’ independence,the affiliated transactions are divided into fair affiliated transactions that are protected by law and unfair affiliated transactions that are regulated by law.Therefore,to the affiliated transactions,especially in the public company whose shareholders exceed 200 or stock is transferred publicly,the definition on their fairness has a great significance to the maintenance of equity principle and the solution of dilemma in practice.The author has made a summarize and analyze on five laws、three administrative regulations、thirty departmental rules and four departmental regulatory documents,as well as twenty-one review opinions given by CSRC on application of initial public offerings and listing of stocks on Shanghai Stock Exchange or Chi Next,of public transfer of stock on NEEQ, of private placement,and of a merger 、 acquisition or restructuring.From the summarize and analyze,author divided the factors which are necessary on the definition of affiliated transactions’ fairness into procedural factors including internal approving procedures and obligation of information disclosure,and substantial factors including forming reasons 、 the significant provisions and the performance of agreements under a affiliated transaction.In addition,the author made an explanation on how the procedural factors and substantial factors to apply and take effect on the real situation in definition on the basis of the summary of domestic scholars’ viewpoints and the reference of foreign rules.Such division and explanation allows this paper to be more innovative.In the end,the author considered that,as one of the procedural factors,the obligation of information disclosure provided a path for substantial factors to take effect in definition of affiliated transactions’ fairness,and meanwhile constitutes the precondition for internal approving procedures to execute smoothly.According to that,,the author raised the viewpoint to improve rules in information disclosure of affiliated transactions in public companies,in order to resolve the matters including minority shareholders’ rational apathy under the information asymmetry.