End of Batch 9 Posts

What are Implications for Directors & Officers Liability under the New Companies Ordinance?

By ZUO LINYU

Background

In respect of directors’ duties and liabilities, the new Companies Ordinance (Cap. 622) (“new CO”) which enacted on March 3rd, 2014 codifies several aspects. A director may incur personal liability both to the company and third parties. As discussed briefly below, the new provisions may have important implications for directors and officers liability.

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The Reopen of China’s IPO: Problems Still Exist

By Zhou Yiwei

Background

 

China imposed a moratorium on IPOs in October 2012, as the country worked at reforming a market where a regulator-guided pricing system was inefficient. After a freeze of more than a year, China reopened the market for IPOs in December 2013. The China Securities Regulatory Commission (CSRC) has announced new laws and regulations that will see more responsibility for pricing put in the hands of investors. Other reforms include moving toward a disclosure-based system for filing IPOs, aiming to improve corporate disclosure. Despite the good initiatives, problems still emerge and discourage investors.

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Disclosure of Interim Results – Will This Change Your Mind?

By YU, Sun Woo

Introduction

Broadridge Financial Solutions Inc., the company that is said to process about 90% of North American companies’ proxy votes, had attempted to make a change in proxy voting policies in early February 2014 (Chasan, 2014), but later by February 10th it decided to forgo any changes and maintain their usual policies (Weinmann, 2014). Such attempt and retraction brings attention towards the concern of confidentiality and information asymmetry.

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‘One Person Company’, to organize the unorganized sector.

By Cora Yau See-Wai

Introduction

Source: (Savla, 2014)

 

The Indian Companies Act 2013, which has came into effect in April 2014, has changed the original requirement of at least two directors and shareholders for a private limited company to one only. With a One Person Company (OPC), sole proprietors, being both the shareholder and the director of the company, can nominate a nominee to become the member in case of the death of the owner. Similar concepts are widely used in Singapore, USA and Europe. (Babwani, 2013)

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Supervisory Board: Protection to Employees in Hostile Takeover

By Yang Jinrui

Introduction

On August 22nd, 2013, J.C. Penney unveiled a poison pill aimed at guarding against a hostile takeover, triggering a 1.43% decline in share price that morning. (Egan, 2013 ) Negative reactions taken by employees to resist takeover are quite common considering equally common layoffs afterwards, which damage both the company and employees themselves (Lichtenberg & Siegel, 1989). To protect both employees and the company in hostile takeovers, the supervisory board in Germany should be a best solution.

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Who is going to repay the troubled China Trust Product

By Wang Zhuojun

Background

Zhongcheng Trust Company raised 3.03 billion yuan ($495 million) invested in Shanxi Zhenfu Energy Group. The huge amount of money cannot be collected after the coal miner collapsed. ICBC also involved in by distributing the trust product to its own clients.

However, both ZhongCheng Trust Company and ICBC refuse to bail out this defaulted investment product.

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