Research On The Validity Of Vam From The Perspective Of Stakeholders' Protection

Via collating and summarizing the judgment concerning the validity of VAM in China,as well as research on the opinions of scholars on this topic,the author finds out that there are some kinds of limitations on the existing research,including but not limited to,first of all,even though consideration has been given to the interests of creditors and minor equity holders when telling the effectiveness of VAM,the judgment on whether or not the interests have been adversely influenced depends on the form of the agreement,i.e.,the party of the agreement.Most of judges and scholars contend that the execution of agreement between the target company and the investor will definitely harm the interests of the creditors and the minor shareholders while the execution of that between the ultimate control person or major shareholder of the target company and the investor appears to be the reach of mutual consensus between the parties,which in no way tends to entail the interests of the third party.Secondly,the judges and the scholars limit the content of stakeholders to the width of creditors and minor equity holders,nevertheless ignoring other stakeholders who may be impacted by the execution of VAM,such as the employees,the management,the institutional investors and the individual investors which are delegated by the institutional ones.Last but not the least,overly emphasizing the extreme interests of minor shareholders and creditors,it is ignored that the best state of corporate governance is the check and balance among all stakeholders.Accordingly,the author introduces the theory of stakeholders' protection,describing the concept and development of stakeholders' protection in order to clarify the connotation of the theory.With the purpose to evidence the practical influence of VAM is not contingent on the diversity of parties who conclude it,three categories of VAM on the basis of different parties emerge,comprising of VAM between the investor and the target company,VAM between the investor and the holders of the target company as well as the VAM among the investor,the company and the holders.Based on the various categories,the author substantively and materially analyze the actual impact of the abovementioned respective category on each stakeholder,which helps draw out the conclusion that party to execution is not the decisive factor which determines the influence on the stakeholders.As a conclusion,it is advisable to first figure out the material influence the VAM may exert on various stakeholders.After that,it is a key step to attempt to make a balance among the stakeholders with all stakeholders' influence taken into consideration,in order to finally judge whether the VAM is valid or not.