The Research On Legal Problems Of The Valuation Adjustment Mechanism In Chinese Private Equity

In China, new requirements have been put forward to make research about related legal problems of the economic practice of Valuation Adjustment Mechanism(VAM) in the Private Equity(PE). Therefore the connotation of VAM as well as its rationality in Private Equity should be made clear properly so that its legality could be proven and its enforce-ability could be analyzed. Firstly,we should have made a classification to the basic connotation of VAM which were given in the previous researches and pointed out those vague problems. It should be made clear that VAM should be a kind of convention that the transaction subject is not certain for the future.Secondly in the aspect of rationality of VAM, VAM could effectively boost transaction efficiency, reduce transaction costs and ease transaction risk. As the legality of VAM in PE had always been the focus of both the theoretical and practical controversy, we has summed up the rule and attitude of the Chinese judicial institutions keeps toward the effectiveness of VAM in PE, and also criticized such attitude. While analyzing the enforce-ability of VAM in PE, we pointed out that different VAMs are limited to different degree in stock market and non-stock market.