Rights And Interests Protection Of Common Shareholders In Differentiated Voting Structure

Differentiated voting rights structure is a breakthrough to the traditional principle of one share,one vote,which divides the voting rights in the equity for differential allocation,and has the characteristics of valuing human capital over assets,which can lock the control right of the company and effectively solve the contradiction between the control right of the new economy company and the financing demand.However,differentiated voting rights structure has been questioned since its birth due to its potential infringement of common shareholders’ rights and interests.The dispute lies in that the voting rights and shares of shareholders are not allocated in equal proportion,and the interests of shareholders with high voting rights and other shareholders are unbalanced.As a result,high-voting shareholders may do something harmful to the rights and interests of common shareholders.The game between special voting shareholders and ordinary shareholders is intensified,and it may even lead to the ineffective operation of corporate governance structure.Differentiated voting structure in China is still in its infancy,so it is imperative to balance the conflict of interest between special voting shareholders and common shareholders and improve the protection system of common shareholders in the differentiated voting structure.In addition to the introduction and conclusion,the research on the protection of common shareholders’ rights and interests in the differentiated voting structure is divided into four parts:The first part illustrates the general theory of differentiated voting right structure.Firstly,the basic concept of differentiated voting rights structure is analyzed,and it is pointed out that special voting shares belong to one kind of class shares in differentiated voting rights structure.In addition,there are significant differences in essence and connotation between the confusing concepts of differentiated voting structure,class shares,special shares and ordinary shares.Secondly,on the theoretical basis,the heterogeneous needs of shareholders,the theory of substantial equality of shareholders and the theory of corporate contract are the legitimate basis for the emergence and development of the differentiated voting rights structure.The second part examines the introduction and practice of the differentiated voting rights structure in our country,which lays the foundation for the following research on the proper approach to the protection of common shareholders’ rights.First of all,at the level of rules,in June 2019,Shanghai Stock Exchange began to allow companies with differentiated voting rights to be listed on the Science and Technology Innovation Board,marking that the discussion of differentiated voting rights structure from the theoretical level has been implemented into a practical system.With the addition of class shares in the first and second drafts of the Revised Company Law,it means that the system will be officially promoted into law.Secondly,at the practical level,more than 20 companies including Youke have applied for listing with differentiated voting rights structure.By summarizing the protection of common shareholders’ rights and interests in the articles of association and the key points of the exchange inquiry,it is clear that in the current practice,for companies with differentiated voting rights structure,The protection of common shareholders’ rights is not only the focus of the exchange regulation but also the essential content of the articles of association.The third part summarizes the problems existing in the protection of common shareholders’ rights in our differentiated voting rights structure.On the one hand,there are some common problems under the internal defects of the system,including the increase of agency costs in the process of applying the differentiated voting structure,the weakening of internal and external supervision mechanism,and the abuse of voting rights by special voting shareholders by solidifying the motivation of control.The essence of these problems is the imbalance of interests among shareholders.On the other hand,the protection of common equity rights and interests in our differentiated voting rights structure is also faced with individual problems.Under the current situation that natural person shareholders are the main shareholders,our information disclosure system needs to be improved,while the internal supervision mechanism is inefficient and the post-relief system is difficult to realize the rights and interests protection in a timely and effective manner.The fourth part puts forward suggestions to improve the protection mechanism of common shareholders based on the development status and existing problems of the differentiated voting rights structure in the local market above.First of all,starting from the principle of legislative path selection and interest balance,it is clear that the legalized substantive supervision mode should be applied,emphasizing the inclined protection of common shareholders while respecting the special voting shareholders’ grasp of corporate control,and paying attention to the interest measurement among shareholders.Secondly,a multi-level rule system is adopted,combining laws and administrative regulations with exchange rules.In terms of the construction of specific rules,firstly,from the perspective of external supervision,through establishing the legal obligations of special voting shareholders,the recognition and restriction of the control right of special voting shareholders are realized in the legal system.The system of information disclosure and remedy after the event should be perfected.Second,from the perspective of internal supervision,the independence of independent directors and supervisors should be guaranteed through the selection process,while the internal supervision function of supervisors should be strengthened,the class share shareholders’ meeting system stipulated in the draft should be perfected,and the rights and interests of ordinary shareholders should be protected.