A Study On Regulating Going Private Of Listed Corporation

The privatation of listed corporation is also known as its non-publication,whichis common in foreign securities markets.Several cases of going private of listedcorporation had came out in Chinese securities market,and left behind some ofproblems because of the absence of related rules.There is no other cases of goingprivate of lised corporation except that,which implies that its rules are not perfectenough,so it is nessesary to learn from other countries to optimize the rules.The word come from foreign contries,translated from “going private”,whichdescribes the process of “publication to privatation”.The concept can be used inmany different context,so it has more than one defininition.In fect,foreign scholarsdo not focus on its definition but just on its several characteristics.There are severalother concepts,like “freeze out”,“minority buyouts”,which have similarmeaning.Going private of listed corporation had been criticized at the beginning,it isreasonable when market players pursuit freedom of transaction.The source of going private of listed corporation is America,where a trend ofgoing private came out in1970s,then the rules of going private began to set up.InAmerica,there are two set of legal system,so the rules of going private consist offederal securities law and state corporation law.American rules of going private oflisted corporation aimed at the protection of minority shareholders.In HongKong,therules of going private of listed corporation have many differences compare toAmerican rules,but they have same spirit of protecting minority shareholders.The regulator in H.K. enforce the law secretly and powerfully.The case of going private of listed corporation took place in Chinese securitiesmarket between the year of2005and2006.These cases left behind few of problemseven though they finished in the end,such as the problem of reminder share.Manymedias and scholars focused on the cases and they began to study on them.But thecore of their study is the motivation of majority shareholder in the going privatetransactions,which was insignificant for the regulator.The construction of going private rules in our country should aim at theprotection of minority shareholders,maintain the fair of going private transactionsand set up basic rules of going private step by step and complete the rules systemfinally.