Research On The Legal Validity Of VAM

In recent years,due to the promotion of the State Council's mass entrepreneurship and innovation policy,China's capital market has triggered a new wave of PE investment.With the wide application of this new investment tool,the interests of entrepreneurs and investors urgently need a mature market environment and a legal environment to protect them.PE investment not only plays an important role in promoting entrepreneurial innovation,but also the widely adopted equity repurchase clause in the investment field makes the exit of investment better protected.However,there are still a series of problems in the practice of VAM in the equity investment with the equity repurchase clause,which has generated a large number of disputes arising from the private equity repurchase clause.Regarding the VAM and the legal effect of the agreed share repurchase clause,there is no clear regulation in our country's law,so there has been a dispute in the judicial trial.The Supreme People's Court considers that the VAM between the investor and the shareholders of the invested company should be protected by law,and there is some controversy over whether the VAM between the investor and the invested company jeopardizes the interests of the creditor or violates the provisions of the company law.As the legal effect of the equity repurchase content in the VAM cannot be determined,it will not be able to exert the best effect in the investment transaction.The content of equity repurchase in the VAM is closely related to the basic principles of Civil Law,not only related to the provisions of the Contract Law on the validity of contracts,but also needs to take into account the relevant provisions of the Company Law.This paper discusses the effectiveness of the equity repurchase clause in the VAM based on typical cases.By summarizing the different perspectives in the case,the article proposes prevention of legal risks for the application of valuation adjustment agreements,and put forward a perfect conception for the future construction of China's related enterprise system.