On The Legal Regulation Of China’s Listed Companies’ Controlling Shareholder Abusing Power

As an important part of the economy society, listed company occupies animportant position. Most of our listed companies, especially state-owned listedcompanies, have controlling shareholders. Controlling shareholders usually enjoyedabsolute ration share, what’s more, they often lack of check and balance, and thecompany governance structure is often imperfect. These all provide benefits to thecontrolling shareholder. In practice, through abusing voting rights, illegal related partytransactions, controlling shareholders encroach assets from company, which in factdamages the company and the benefits of most minority shareholders. In2006, therevised Company Law put into force, introducing much advanced legal systems, suchas independent directors、disregard of corporate personality, which do made greatprogress in regulation the controlling shareholder abusing power, but still exists muchdeficiency. This thesis combine practice from home and abroad, around the legalregulation of our listed controlling shareholder’s behavior of abusing power, mainlydiscussed in four aspects.The first part is the definition of our controlling shareholder abusing power.Through a summary of the standard to define a controlling shareholder, we have aclear understanding of the concept of controlling shareholder. Then compare thedifference between controlling shareholder and major shareholder、actual controller.The second part examined the current situation of China’s listed company’scontrol of the controlling shareholder abuse. Then analyzed the origin of thisphenomenon, so as to provide specific measures.The third part examined overseas laws on controlling shareholder abusing power.Mainly studied the laws on related party traction、balancing controlling shareholderand minority shareholder, and procedure rules.The fourth part is the core of this thesis, from both procedural and substantivelaw, proposed suggestions to perfect the law regards controlling shareholder’s rights.On the substantive law, mainly discussed information disclosure、related party tractionand limitation and exclusion of shareholder’s voting rights, and the perfect of minorityshareholder’s rights; On the procedural law, mainly provide suggestions on thedirect shareholder litigation and shareholder derivative litigation. The writer suggestwe should perfect laws on the application condition、damages mechanism and burden of proof. In regard to shareholder derivative litigation, the writer suggest we shouldperfect the right person to launch an suit, the amount of stakes, pre-program andlitigation borne system.