| In China Mainland,Regarding the legitimacy of the super-majority rules,securities regulatory bureaus and stock exchanges held suspicious and prudent attitude.But the China Security Investor Services Center(ISC)hold the view that super-majority rules were illegal.To be more specific,securities regulatory bureaus and stock exchanges did not announce whether the super-majority rules is legal or illegal.However,they used interviews and inquiry letters to the listed companies that intend to set the super-majority rules.The inquiry letters of stock exchanges were aimed to ask listed companies to answer the questions in the field of the compliance with the company law,the protection of minority shareholders’ right and the grant of disguised one-vote veto power to major shareholders.So because of the pressures from interviews and inquiry letters of the securities regulatory bureaus and stock exchanges,some listed companies abandoned setting the super-majority rules.More radically,the China Security Investor Services Center announced that super-majority rules were illegal in the aspect of China’s company law.And it used its shareholders’ right and send suggestions letters to require listed companies to cancel many kinds of shark repellent(also called anti-takeover clauses of articles of association)including the super-majority rules.In a word,there was a big challenge from three departments of China Securities Regulatory Commission(CSRC)to the super-majority rules.However,in the view of natural interpretation,Article 5 of the Supreme People’s Court’s “Corporate Law Interpretation IV” actually has admitted the validity of thesuper-majority rules.Although the author did not find the evidence that the Supreme People’s Court’s supports the shark repellent or super-majority rules in the background information on the legislative process,such as the news of press conference of the “Corporate Law Interpretation IV” and the book of the Supreme People’s Court in the field of understanding and application “Corporate Law Interpretation IV”.Article 5 of the “Corporate Law Interpretation IV” would greatly reduce legal risks of the super-majority rules for the listed companies which urgently need anti-takeover measures.In China Mainland,many kinds of shark repellent may be illegal,such as classified board(staggered board),golden parachutes,clauses to enhance shareholders’ obligation of information disclosure,clauses to limit convening right of general meeting of shareholders,clauses to limit shareholders’ nomination rights for directors,clauses to limit shareholders’ proposal rights for the general meeting of shareholders.For legitimacy of these shark repellent,there is no common theory from academic circles of China.And stock exchanges sometimes use inquiry letters to express worry about the legitimacy of these shark repellent.Even the China Security Investor Services Center has announced that these shark repellents are illegal.So in the background that article 5 of the “Corporate Law Interpretation IV” give legitimacy to the super-majority rules,super-majority rules might play an more and more important role in anti-takeover measures.It is worth noting that not only the new situation of the super-majority rules has emerged in the legal practice—— "discriminatory choice super-majority rules".But also new kinds of super-majority rules may appear in the background that article 5 of the “Corporate Law Interpretation IV”.On the one hand,like the contingent super-majority in America,“discriminatory choice super-majority rules” means that the board of directors of list companies have the power to decide whether super-majority rules would apply to the shareholders’ meeting proposal of hostile takeover.On the other hand,article 5 of the “Corporate Law Interpretation IV” might make super-majority rules apply to attendance ratio of the shareholders’ meeting and board of directors of list companies.The article 5 of “Corporate Law Interpretation IV” also has a legislative loophole and defect——as the article 5 of “Corporate Law Interpretation IV” provides :“ Wher e the number of attendees showing up at the meeting or the voting rights held by present shareholders do(es)not comply with provisions of the Company Law or the company’s articles of association”.The list company’s articles of association could require that some important kinds of shareholders’ meeting proposal need most of long-shareholding-time shareholders appear,which could play the anti-takeover roles and discriminate against new shareholders included hostile acquirer.Besides,this research also found that: On the one hand,from the angle of application purpose,super-majority rules in China Mainland could be divided as anti-takeover super-majority rules and protection of certain shareholder super-majority rules.On the other hand,the design of anti-takeover super-majority rules should learn from constituency provision.Subjective factors of the board of directors and controlling shareholders should be reduced.Considering,In the background of article 5 of the “Corporate Law Interpretation IV”,anti-takeover super-majority rules would play a more and more important role in the hostile takeover activities.If the anti-takeover super-majority does not have a border and limit in the field of anti-takeover,it might make inappropriate barriers to hostile takeovers.In a word,research for the limit and border of super-majority rules in the background of article 5 of the "Corporate Law Interpretation IV" is urgent and important. |
