Strengthening the Regulation of Affiliated Transactions

A judicial interpretation issued by the Supreme People's Court is likely to lead to further shareholder representative litigation in respect of affiliated transactions, although more clarity is needed

9 minute readAugust 02, 2019 at 02:51 AM

Susan Mok

Strengthening the Regulation of Affiliated Transactions

An affiliated transaction is a special type of self-transaction involving a conflict of interests. A fair affiliated transaction can stabilize a company's business and reduce transaction costs, which is beneficial to the company's development, and therefore the PRC Company Law (Company Law) (中华人民共和国公司法) does not simply prohibit such activity.

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