What Is Proxy Purchase?

2011/1/19 14:41:00 44

As an innovative financial instrument, entrustment acquisition guarantees the participation of small and medium shareholders in major decisions of listed companies by principal-agent relationship.

Right

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The intention of legislators to set up the power of attorney is to enable small and medium shareholders who are unable or unable to participate in the general meeting of shareholders to exercise their voting rights in the form of trust, through legitimate channels.

This is of great significance to the perfection of corporate governance structure.

On the one hand, the acquisition of proxy will enable the convening of shareholders' meetings to reach a quorum.

increase

The efficiency of the company makes the minority shareholders concentrated.

Vote

The exercise of rights is the realization of the rights of shareholders. On the other hand, it has the advantages of low acquisition cost, simple procedures, both independent use and the use of equity buyout. Therefore, it has become a form of acquisition in parallel with equity purchase in the international market.

However, as a kind of acquisition, the power of attorney's purchase is a double-edged sword. It always perfected the corporate governance structure and damaged the interests of the company and shareholders. At the same time, its advantages also made it easy to become an effective and cheap tool. It was used to compete for the company's rights and interfere with the normal operation of the company, or was used to "do the bureau", manipulated the stock price, and profiteering in the two tier market, affecting the stable development of the securities market.

The history of more than 20 years' development of proxy purchase in other countries and regions also illustrates these problems.