On Directors’s Fiduciary Duties Of The Target Company In Takeover Defense

The constant change of the company system and sustainable development ofmarket economy is bringing a new turn to our country’s acquisition market. And thecontention of the company’s control is becoming increasingly intense. In order toresponse to the acquisition effectively, many companies through a series ofanti-takeover measures to set the various obstacles to the acquirer, which aimed todelay the acquirer enter the board of directors or reduce the acquisition value of thetarget company so as to achieve the effect of the anti-takeover. However, due toimmaturity of China’s anti-acquisition experience and lack of legislation andregulation, consideration for their own interests, directors abuse anti-takeovermeasures to prevent the conduct of the acquisition, which is opposite to the valuetargets of anti-takeover. Anti-takeover system is set up to allow the operator to reach areasonable purchase price by the anti-takeover measures, to prevent the fate of thecompany to be reorganized and to keep the continued stability of the company’sbusiness decision-making. Therefore, it is necessary to regulatory of fiduciary dutiesof target company’s management in anti-takeover so as to protect interests of thecorporate and shareholders. Author proposes ideas to perfect directors’ fiduciary duties related to system through a comparative analysis of domestic and internationallegislation and combination of the existing Corporate Law, Securities Law and otherdepartmental rules and regulations.The text of this paper made up of four chapters, and each chapter are as follows:The Chapter I is "the Value Analysis of Directors’ Fiduciary Duties in Anti-takeover ".This chapter elaborates the value of strengthen the fiduciary duties of target companydirectors in anti-takeover, and reveals the necessity for regulatory of the fiduciaryduties of the directors in target company.The Chapter II is "Foreign Law Legal Regulation of Directors’ Fiduciary Dutiesin Anti-takeover". In view of the legislation directors’ fiduciary duties of targetcompany in anti-takeover is different between Britain and America and both country’slegislation has its rationality, author aims to reveal their different causes throughdiscussion legislation of these two countries in this chapter.The Chapter III is "The Status Quo Directors’ Fiduciary Duties of TargetCompany in Anti-takeover in China". Author investigates the attribution of China’santi-acquisition decision-making power and combs the existing Corporate Law,Securities Law and other departmental rules and regulations. And proposes thereflection to directors’ fiduciary duties of the related systems on this basis.The Chapter IV is "The Construction of Directors’ Fiduciary Duties System inAnti-takeover in China". This chapter proposes legislation completely of duty of careand the duty of loyalty of directors in target company respectively, supplemented bythe internal regulation and accountability mechanisms.