| Along with the completion of the shareholding reform,the controlling shareholders of listed companies have been reducing their shareholdings year by year,and the shareholding ratio of the first largest shareholder of listed companies has been declining,thus gradually highlighting the value of listed companies;in addition,the payment methods in mergers and acquisitions of listed companies have also become more diversified from the previous cash payment,alleviating the capital pressure of the mergers and acquisitions.The current round of hostile takeovers has aroused strong reactions from the society,and many listed companies have started to resist hostile takeovers by adding anti-takeover clauses to their articles of association,as well as adopting employee share ownership plans,suspending trading to resist takeovers and looking for “white knights”,etc.However,in practice,listed companies often suffer from However,in practice,there are often problems such as lack of reasonableness and ineffectiveness in defending against hostile takeovers.The “poison pill” has become one of the most effective anti-takeover measures after continuous practice in foreign countries(mainly in the United States),but there is little room for this anti-takeover measure in China due to the fact that China still adopts a registered capital system and has long adopted an approved system for share issuance.The introduction of the authorized capital regime in the Draft Revised Company Law of the PRC and the Second Review Draft Company Law of the PRC(Draft Revised)published in 2022,and the full implementation of the registered share issuance system in 2022,have provided the institutional ground for the application of the “poison pill”scheme in the domestic capital markets of China.This provides the institutional ground for the application of the “poison pill” in China’s domestic capital market.The “poison pill” has a higher anti-takeover efficiency and success rate than other anti-takeover measures by giving the original shareholders of the target company additional rights and interests to defend against hostile acquirers.The loosening of the capital system and the full implementation of the registration system for stock issuance also provide the basis for the application of the “poison pill”,so in the future China’s company law can consider the introduction of a modern “poison pill” of the precautionary type,and give the board of directors the “poison pill” decision-making power.This will enable listed companies to more effectively defend themselves against hostile takeovers and to promote and maintain the company’s ongoing operations.At the same time,the Board of Directors’ motives for implementing the “poison pill” and its reasonableness should also be reviewed,and the directors’ fiduciary duties should be strengthened to ensure that the Board of Directors does not adopt the “poison pill”to defend its own position,but to protect the company and shareholders’ rights and interests.To ensure that the Board’s adoption of the “poison pill” is not to protect its own position but to safeguard the interests of the company and its shareholders and to urge it to actively perform its management duties. |
