Listed Companies Controlling Shareholder Of The Company Of The Related Party Transactions Regulation System

Connected transaction means that the acts between listed companies and their affiliated parties which could lead to the transfer of rights and benefits. Currently in China's securities market, connected transaction is extremely frequent, in which connected transaction by controlling shareholders of listed companies accounts for a large proportion. Unfair connected transaction by controlling shareholders is very common. Controlling shareholders through unfair connected transaction gain enormous benefits and do great damage to the company, minority shareholders, and the interests of creditors and affect the healthy development of the securities market.According to the scholars of statistics, the study of the transfer of the controlling shareholder interests mainly explores two aspects: improve laws and corporate governance structure. The study using the controlling shareholders' connected transactions as binding conditions is relatively less. Meanwhile, with the newly amended "PRC Company Law" taking effect on January 1^st, 2006, the warm concern about connected transaction seems to have gradually disappeared. However, the increase of the regulations does not represent the end of the study on a problem. Whereas the law has come into implementation for a very short time, and the relevant legal provisions are scattered, People's theory and practice ofChina's company law in connected transactions do not form the system of knowledge. Therefore, the dissertation chooses unfair connected transaction by listed companies as a focal point, analysises the regulating system of PRC Company Law", and studies the following issues :The first part of the dissertation searches into rules interpreting the legal term — connected transaction in different jurisdictions and in different law departments. The legal character and economic function of connected transaction are discussed.The second part, based on the discussion of the concept of the controlling shareholder, analysis the actual situation of controlling shareholders of Chinese listed companies. The reasons why unfair connected transaction by controlling shareholders are so common and the main types of unfair connected transactions are searched into.The third part, using "Company Law" of 1993 as a reference, analysis and clarify of the Regulations of existing "Company Law" in connected transactions by controlling shareholders of listed companies. Regulations of the existing "Company Law" regulating the controlling shareholders' connected transaction formed a three-dimensional system with prior prevention, middle supervision and after relief. Prior prevention includes duty of care and loyalty of controlling shareholder. Middle supervision includes the supervision by the independent director and the supervisory board. The after relief give different victims differentrelieving way. Through analysis of the existing legal system regulation, deficiencies and problems are found and modification recommendations are given.