Search results

Squeeze-out transactions are controversial as the controlling shareholders may expropriate the minorities' shareholdings at unattractive prices. Existing scholarship has focused on the optimal approach towards regulating such transactions in the US and the UK, which have widely dispersed public shareholdings, but little attention is placed on jurisdictions with concentrated shareholdings, which may necessitate a different approach given that the prospects of expropriation are very high. This article fills the gap by examining Hong Kong and Singapore, which have concentrated shareholdings. Notwithstanding the fact that they have adapted their corporate and securities laws from the UK, Hong Kong ultimately provides greater minority shareholder protection than Singapore. We present empirical evidence that the differences in regulation have led to a smaller number of squeeze-outs but higher premium payable to minority shareholders in Hong Kong, as compared to Singapore. However, Hong Kong firms experience higher levels of related party transactions prior to the squeeze-outs, which represent another form of tunnelling. We explain that the differences in regulation and discuss the normative implications of our findings. Our study contributes to the broader literature that "law matters" and provides case studies of how interest group politics shape the evolvement of laws and regulation.

The paper deals with the most debatable questions about the legal nature of corporate relationships based on the membership of joint stock companies, namely the legal status of majorities and minority interests and the squeeze-out and sell-out mechanisms in these legal relationships and the conflicts of interest between these entities, which is called greenmail, about the scope of these relationships and about the basis of corporate relationships based on actual composition. In the corporate and commercial law of Ukraine, some of the most debatable issues are the legal status of minorities and majorities and the squeeze-out procedure based on the legal relationship between these entities. Adoption of the Target Law "On Amendments to Certain Legislative Acts of Ukraine on Improving Corporate Governance in Joint Stock Companies" in 2018 adds some optimism to solving the traditional problems in this area, as well as the current changes to the laws regulating relations between minority shareholders and majorities. in business entities. In 2018, squeeze-out legislation came into force in Ukraine. This procedure enables a majority shareholder (or group of majority shareholders) who owns 95 percent or more of the shares of a joint stock company to oust the minority shareholders (the remaining shareholders holding 5 percent or less of the shares) and become a sole proprietor of the business. During this time, majority shareholders in more than 200 companies have exercised their right to hold squeeze-out. In the realities of today, there are many businesses where majority shareholders are still arguing over whether to hold squeeze-out. These disputes may arise from the prospect of litigation with minority shareholders in Ukrainian courts, though undergoing reform but still often making unpredictable or biased decisions. For certain majorities, squeeze-out is not limited to the procedure for buying back shares from minority interests, but continues - disputes with minority shareholders in Ukrainian courts. Minorities ask ...

AbstractAs an outcome of the scientific conflict within business valuation theory in the German-speaking area,New Political Economy of Business Valuationhas developed a possible approach to explain the dissemination of neoclassical valuation concepts in theory and practice. This explanatory model, designed by Quill (2016), is extended by Follert (2020) to include the share valuation in squeeze-out cases for the compensation of minority shareholders. For this purpose, the different actors in the legal mediation procedure ("Spruchverfahren")—the judge, the auditor as expert, and the conflicting parties—are modeled based on their stereotypical interests. The aim of the present paper is to introduce international scientific community to the scientific conflict between the proponents of investment-theoretical and those of the finance-theoretical conception, and to discuss the role of judicial decision-making from a legal-economic perspective. We would like to illustrate why a judge could benefit from the use of finance-theoretical valuation methods based on the neoclassical capital asset pricing model recommended by the relevant standard (so-called standard 1) of the "Institut der Wirtschaftsprüfer in Deutschland IDW" (Institute of Public Auditors in Germany) ("IDW S 1"). The analysis takes a socioeconomic perspective and argues that judicial valuation is primarily influenced by the judges' tendency to promote their own reputation and by social pressure from their professional environment and different interest groups. This paper adds a further perspective toNew Political Economy of Business Valuation. Moreover, the close link between jurisprudence, economics and business economics theory is pointed out. Although the approach presented deals with the squeeze-out under German law, it may be applicable to squeeze-out arrangements in other countries as well, as long as the basic assumptions apply in their legal systems.