Studies On The Legal Regulation Of Cross-shareholding

A company's cross-shareholding refers to a phenomenon in which two or more companies hold each other's shares for certain purposes.Crossshareholding can bring huge economic advantages,so many countries approve it.The cross-shareholding between companies is conducive to stabilizing the corporate alliances and helping companies achieve their long-term interests.At the same time,it can stabilize the company's operation and prevent a hostile takeover.It also helps company's financial operations,for it facilitates the operation of cross-shareholding companies' internal capital flows.However,there are some drawbacks in the cross-shareholding of companies.For example,it can cause the company's capital to inflate,and result to company's decision-making to be under control and form monopoly.Therefore,the crossshareholding is a double-edged sword.We should treat the advantages and disadvantages of the company's cross-shareholding separately and regulate them separately to make it a valuable role in the society.In China,the cross-shareholding of the companies merely began to develop very recently,but its rapid development is in line with the demand of China's corporate shareholding system reform.As in China's stock companies,its equity structure is relatively concentrated because it is mainly consisted of state shares and corporate shares,which provide good conditions for the crossshareholding between companies to develop.This article refers to the legislative model of cross-shareholding in other countries.At the same time,the assay compares and analyzes the practical experience of other countries with the facts of China's economic development to solve the legislative problem of cross-shareholdings in China.This article will discuss the following issues:The first part analyzes practical cases and introduces the concept of crossshareholding.Then the author defines the concept of cross-shareholding,which is the holding of the other companies' shares based on mutual investment between two or more companies.We can divide cross-shareholdings into several sorts according different standards,the horizontal and vertical crossshareholdings,direct and indirect cross-shareholdings,and long-term crossshareholdings and short-term cross-shareholdings.There are three types of cross-shareholdings in the legislative model,including the easy model,the strict restrictive model,and the discriminatory model.For the conceptual introduction of cross-shareholding,it can provide readers a certain macro-level understanding of the company's cross-holding of shares.The second part reviews the current problems of cross-shareholdings of companies in China,such as obvious industry bias,single-purpose crossshareholdings,and the proportion of cross-shareholdings being too small.Then,the author will explore the main causes for these problems.The third part researches the specific legal systems of cross-shareholdings in foreign countries,compares the different legislative models of the United States,France,and Japan to introduce and analyze the legislation on crossholding of shares.These existing differences can provide experience for China's cross-shareholding legislation.The fourth part expresses the author's opinions and suggestions on improving China's cross-shareholdings system.For legislation,it is necessary to choose an appropriate legislative model,as the author suggests the discriminatory model.For the specific provisions,it is necessary to distinguish between listed companies and non-listed companies,and horizontal and vertical sorts of cross-shareholdings.For accessory institution,it is necessary to strengthen the supervision of the CSRC and incorporate the crossshareholdings into the information disclosure system.Finally,the company must improve the independence of executive board and enhance the capability of supervisory board.