Digital Commons Network^™

Shareholder Exit Signs On Us And Eu Highways, Raluca Papadima

Raluca Papadima

Legal Transplantation Or Legal Innovation? Equity-Crowdfunding Regulation In Taiwan After Title Iii Of The U.S. Jobs Act, Chang-Hsien Tsai

Chang-hsien (Robert) TSAI

Is Moderation The Highest Virtue? A Comparative Study Of A Middle Way Of Control Transaction Regimes, Yueh-Ping Yang, Pin-Hsien Lee

Yueh-Ping Yang

Comparative studies of control transaction regimes mostly compare between the Market Rule as adopted in the U.S. and the General Offer Rule ad adopted in European Union, while paying less attention to the Partial Offer Rule, a middle way model adopted in many East Asian countries such as Japan, South Korea, China, Taiwan, etc. In this paper, we attempt to fill this gap by highlighting the Partial Offer Rule adopted in these countries, analyzing this rule’s theoretical foundation and observing its implementation in practice. Our theoretical analyses of the Partial Offer Rule are comprised of two parts. First, by adding …

Law And Finance: The Case Of Stock Market Development In China, Zhong Zhang Dr

Zhong Zhang Dr

Having grown to one of the largest in the world in just over two decades, the stock market of China is cited as a counterexample to the significance of law for financial market development. A thorough examination of the development of China’s stock market however finds that law is actually critical to sustaining market growth and law did play a role in the growth of the market. On the other hand, the trajectory of development in China is growth first followed by law, and the improvement of law is caused by market growth. The experience of China hence suggests that …

Puzzles In Controlling Shareholder Regimes And China: Shareholder Primacy And (Quasi) Monopoly, Sang Yop Kang

Sang Yop Kang

Professor Mark Roe explained that the shareholder wealth maximization norm (“the norm”) is not fit for a country with a (quasi) monopoly, because the norm encourages managers to maximize monopoly rents, to the detriment of the national economy. This Article provides new findings and counter-intuitive arguments as to the tension created by the norm and (quasi) monopoly by exploring three key corporate governance concepts that Roe did not examine—(1) “controlling minority structure” (CMS), where dominant shareholders hold a fractional ownership in their controlled-corporations, (2) “tunneling” (i.e., illicit transfer of corporate wealth to controlling shareholders), and (3) Chinese state-owned enterprises (SOEs). …

Controlling Shareholders: Benevolent “King” Or Ruthless “Pirate”, Sang Yop Kang

Sang Yop Kang

Unfair self-dealing and expropriation of minority shareholders by a controlling shareholder are common business practices in developing countries (“bad-law countries”). Although controlling shareholder agency problems have been well studied so far, there are many questions unanswered in relation to behaviors and motivations of controlling shareholders. For example, a puzzle is that some controlling shareholders in bad-law countries voluntarily extract minority shareholders less than other controlling shareholders. Applying Mancur Olson’s framework of political theory of “banditry” to the context of corporate governance, this Article proposes that there are at least two categories of controlling shareholders. “Roving controllers” are dominant shareholders with …

Re-Envisioning The Controlling Shareholder Regime: Why Controlling Shareholders And Minority Shareholders Embrace Each Other, Sang Yop Kang

Sang Yop Kang

According to conventional corporate governance scholarship, controlling shareholder regimes exist in jurisdictions where minority shareholders are not well protected by controlling shareholders’ expropriation. However, Professor Ronald Gilson raises a critical point against the conventional view; if laws are inefficient and do not protect investors, as the conventional view explains, why do we observe any minority shareholders at all in such “bad-law” countries? One possible reason is that in response to controlling shareholders’ expropriation, minority shareholders discount severely shares that corporations issue. Then, a related question is: if it is true, why do some controlling shareholders in bad-law countries have many …

The Resolution Of The Structured Notes Fiasco In Hong Kong, Singapore, And Taiwan, Christopher Chao-Hung Chen

Christopher Chao-hung CHEN

This article argues that alternative dispute resolution is not a panacea for settling massive investor complaints. Regulators must create clear and effective conduct of business rules and strengthen the contractual composition of structured products to give investors a better chance of recovering their investments in an event such as Lehman’s collapse.

The Uncertainty Of “True Sale” Analysis In Originator Bankruptcy, Stephen P. Hoffman

Stephen P. Hoffman

While much of law is complex or unclear, it is unusual for a judge to comment that a legal doctrine is so unsettled that courts “could flip a coin” to decide an issue. Unfortunately for practitioners, determining what constitutes a “true sale” for bankruptcy purposes is such an issue. Add to this the recent novel and innovative processes of structured finance and asset-backed securitization, and you have the stuff of law students’—and corporate counsels’—nightmares. As a result, courts and legislatures need to provide clarity in this area so that originators can safely structure investments and transactions, not only for the …

International Jurisdictional Competition Under Globalization: From The U.S. Regulation Of Foreign Private Issuers To Taiwan’S Restrictions On Outward Investment In Mainland China, Chang-Hsien Tsai

Chang-hsien (Robert) TSAI

Drawing a lesson from the story that the Sarbanes-Oxley Act drives away foreign issuers and then their physical exit provokes a change in the U.S. regulation of non-U.S. issuers, this article takes as another case study the phenomenon that Taiwanese firms list shares overseas, to further test how usual law market demand and supply forces (or underlying exit and voice rights) interplay under international jurisdictional competition. Put simply, both cases of the U.S. and Taiwan significantly elaborate that law market forces underlying international jurisdictional competition are similarly at work even on both sides of the Pacific Ocean. Specifically, globalization strengthens …