Rules aim at foreign investment firms
August 17, 2010, Tuesday
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Print Edition
Print Edition
CHINA'S Supreme People's Court yesterday issued a set of regulations providing a detailed ruling for cases involving foreign investment companies regarding share transfer, anonymous investment and other procedures.
The regulations mainly focus on conflicts involving foreign limited liability companies, including the effectiveness and legal consequences of equity transfer contracts without administrative approval, according to a statement on the website of the supreme court.
The new rules also specify various conditions for anonymous investment, and consider contracts invalid only when investors allegedly violate laws and regulations or intent to escape legal responsibilities.
The move aims to protect investors who invest anonymously when it is not proper to reveal their names.
According to the statement, conflicts involving foreign investment companies accounted for about 20 percent of all foreign-related civil and commercial cases over the past two years.
"Among these cases, conflicts involving share transfer, anonymous investment, merger and liquidation saw a sharp increase, and the legal problems reflected in these cases are very complicated," the statement said.
The supreme court spokesman Sun Jungong said the rules will play a positive role in ensuring equal rights of domestic and foreign investment companies.
However, the document did not cover merger conflicts.
"These conflicts are more complicated as they not only involve private laws but also public laws such as the Anti-monopoly Law," Sun said. "The legal basis is inadequate. So it's not the right time to map out judicial interpretations for them."
The regulations mainly focus on conflicts involving foreign limited liability companies, including the effectiveness and legal consequences of equity transfer contracts without administrative approval, according to a statement on the website of the supreme court.
The new rules also specify various conditions for anonymous investment, and consider contracts invalid only when investors allegedly violate laws and regulations or intent to escape legal responsibilities.
The move aims to protect investors who invest anonymously when it is not proper to reveal their names.
According to the statement, conflicts involving foreign investment companies accounted for about 20 percent of all foreign-related civil and commercial cases over the past two years.
"Among these cases, conflicts involving share transfer, anonymous investment, merger and liquidation saw a sharp increase, and the legal problems reflected in these cases are very complicated," the statement said.
The supreme court spokesman Sun Jungong said the rules will play a positive role in ensuring equal rights of domestic and foreign investment companies.
However, the document did not cover merger conflicts.
"These conflicts are more complicated as they not only involve private laws but also public laws such as the Anti-monopoly Law," Sun said. "The legal basis is inadequate. So it's not the right time to map out judicial interpretations for them."
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