Protection Of Minority Shareholders’ Rights In Improperly Connected Transactions

In the development of the securities market,investor protection is an eternal theme.Especially for the protection of minority investors.As the most active and largest group in the capital market,they are related to the stable development of the capital market.However,cases of infringement of the rights and interests of minority shareholders are common and intensified in practice.Improper connected transactions are one of the most convenient and commonly methods,and are used by listed company’s controlling shareholders to infringe the rights and interests of minority shareholders.Alienation of related party transactions usually manifests in the way that controlling shareholders use illegal guarantees,unfair pricing(buy high and sell low)purchases and sales,capital occupation,and inflated profits to attract investment to take cash,etc.The coat of the transaction “lawfully” seriously violated the legitimate rights and interests of minority shareholders,dampened investment enthusiasm,and affected the smooth operation of the market.Investigating the reasons,the company’s internal governance structure: Unlike the scattered ownership characteristics of Western countries,a dominant share is the general structure of listed companies in China.The principal-agent relationship between the major shareholder and the small shareholder becomes the main agency contradiction.Secondly,factors such as the alienation of the capital majority,the independence of the independent directors,and the lack of faithful obligations have led to a lack of effective internal checks and balances on the controlling shareholder;external laws and regulations and industry supervision: due to the lag of laws cannot keep up with market changes and The development,coupled with the scattered regulatory documents of the law governing related party transactions,have varying effectiveness,low penalties,the absence of securities civil liability laws,and the difficulty of litigation by minority shareholders of listed companies have made major shareholders lack of awe of the law.Attaches importance to the rights and interests of minority shareholders;minority shareholders themselves: the "weak" status caused by minority equity has a low participation rate in corporate governance.In view of the abuse of control by controlling shareholders in recent years,cases of infringing on therights and interests of minority shareholders through various improper related party transactions have emerged.This article selects the topic and takes countermeasures to prevent the protection of minority shareholders’ rights In the related party transactions,suggestions and measures are put forward from the internal governance,laws and regulations of the company and external supervision and minority investors themselves.It is hoped that the standardization and governance of related party transactions and the protection of minority investors’ rights and interests will be of certain significance.