Chinese Derivative Suits  

Oleh:

Watters, Casey

Jenis: Article from Proceeding
Dalam koleksi: SIBR-Thammasat 2014 Conference on Interdisciplinary Business & Economics Research June 5th- 7th, 2014 di Emerald Hotel Bangkok, page 1-8.
Topik: derivative suit; SOEs; China; shareholder protection
Fulltext: b14-134.pdf (95.96KB)

Isi artikel

The difference in capital structure between the US and China makes derivative suits, at least as utilized in the US, an ineffective tool for protecting shareholder rights in China. Generally, for a derivative suit to be profitable the suing party must have a significant enough interest in the company to have the prospect of a return on the suit. In China, the majority of large companies are state owned enterprises with non-government stockholders comprising a significantly lower percentage of the holdings in China. As a result, there are less people to bring derivative actions, and with less incentive. Another major reason derivative suits are largely ineffective tools in China is the institutional structure of companies. In the US, business leaders are generally not appointed by the government. However, many business leaders in China are appointed by government officials. A derivate suit is directed at the leaders (executives or directors) of a business – generally people appointed, directly or indirectly, by the government.

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