| A common method to defend hostile takeover for listed companies is to adopt anti-takeover provisions in company charter.With the frequency of hostile takeover increasing,it is more often to see listed companies using anti-takeover provisions.Frequently used anti-takeover provisions are:staggered board provision,super-majority provision,golden parachute provision,etc.Currently,the Chinese legal system has no regulations on anti-takeover provisions.Anti-takeover provisions usually constrain stock right or adjust rules of shareholders meeting and the board,thus arise debates over its legitimacy.After the "Bao vs.Wan fight",several listed companies in China attempted to adopt anti-takeover provisions in company charter,and they received "letter of concern" from the Shenzhen Stock Exchange regarding the legitimacy of the provisions.Using the method of sending "letter of concern" is not a sustainable way to supervise listed companies,the legislation on anti-takeover provisions is urgently needed.Chapter 2 introduces the concept of"takeover,hostile takeover and anti-takeover measures".Chapter 3 first gives the definition of anti-takeover provisions,and explores the foreign legislation on anti-takeover provisions,in the end,provides several recent cases of listed companies in China adopting anti-takeover provisions.Chapter 3 discusses the general legal principles that are applicable in the regulation of anti-takeover provisions.Firstly,the provisions shall not violate the fundamental rights of shareholders.Secondly,the provisions shall not breach the limit of the freedom of company charter,Chapter 3 provides four principles,including the equality of shareholders,the trading right of stock right,non-abuse of stock right,beneficial to the listed company as a whole.Also,Chapter 3 discusses the legal interests affected by anti-takeover provisions,including the legal interests of investors,the target listed company and its shareholders.Chapter 3 gives the frame of the discussion in Chapter 4.Chapter 4 analyzes the legitimacy of anti-takeover provisions from three angles,the violations of stock right,the limit of company charter,and the legal interests involved,Chapter 4 gives the conclusion that the staggered board provision is valid,the other provisions are invalid because of their violation against the principles provided in Chapter 3 and their harm to the legal interests discussed in Chapter 3.At last,Chapter 5 provides some suggestions on anti-takeover provisions regulation in China,including establishing the legal rules over anti-takeover provisions,deciding the legitimacy of frequently used anti-takeover provisions,establishing the deciding agency that determines the legitimacy of anti-takeover provisions,establishing the case system of anti-takeover provisions,establishing the information disclosure system of anti-takeover provisions. |
