A Review of the Provisions Supplied By recently Amended PRC Company Law to Protect Shareholders’ Interests-法搜-中国法律信息搜索网

　　　　 after explaining their purposes to the company. The company can refuse to provide these books within 15 days after receiving the request, but the decision-maker must have a reasonable basis to believe those shareholders have improper purposes.
　　　　 This significant reform expends minority shareholders’ powers to prevent majority shareholders expropriating potential benefits at the expense of the weaker. Nevertheless, how can a judge grasp the standard of “improper purposes” and “a reasonable basis”?
　　　　 Besides, the recently amended CCL does not rationally restrict the shareholders’ rights to inspect by setting a length and size of holding. It is possible that things will develop towards the other (totally wrong) direction when they become extremes.
　　　　
　F. Independent Directors in Listed Companies
　The recently amended CCL validates the mechanism of independent directors in listed companies, which was first established by China Securities Regulatory Commission (CSRC).
　　　　 Independent directors are deemed to have an especially important role in the fields of audit, nomination, and examination which are mainly about conflicts of interests in the company. It may enrich the framework of different types of committees and remarkably enhance the transparency of decision-making. The technical knowledge of independent directors can help listed companies perform even better. It does serve to protect majority shareholders from vicious directors and minority shareholders from abusive controlling powers.
　However, the mechanism of independent directors has been continuously criticized since its emergence in America. Can we constructively incorporate it into our legal system without other bonding devices? As a matter of fact, majority shareholders and managers in our market have no drive to really initiate this mechanism.
　　　　 And it is doubtless that there will be substantial illegibility between the supervisory committee and independent directors. In the next place, independent directors are lack of sufficient inspirations to maximize the interests of shareholders. What they care about is their own substantive rewards. Last but not least, it is difficult to ensure that independent directors will act “independently” according to the legal norms. Whether representatives of affiliated companies, suppliers, and important customers will be disqualified on the grounds of conflicts of interests based upon a strict and precise procedure? It is hard to say.
　　　　
　III. IN-COMPANY PROCEDURAL RULES AND MECHANISMS
　A. Mechanism of Cumulative Voting
　The recently amended CCL introduces the mechanism of cumulative voting
　　　　 by which minority shareholders can incorporate dispersive powers and act as one united group in order to choose their candidates on the election of directors and supervisors. Minority shareholders do need several directors on behalf of them to make corporate decisions,
　　　　 for the sake of representing their minds.
　　　　 It is no doubt that this mechanism provides them a fair opportunity to check majority shareholders (and the boards of directors materially dominated by them) to a certain extent. But could cumulative voting be permissible on a regular basis? No. According to article 106 of the recently amended CCL, it is unfortunately restricted by the certificates of incorporation or the resolutions of the shareholders’ meeting, both of which are evidently determined by majority shareholders.
　　　　 Therefore, the reform of the recently amended CCL is, in my opinion, unduly cautious on the aspect of minority shareholders’ rights to vote senior managers. A good framework, cumulative voting, will be impracticable without ample correlative prerequisites. Furthermore, cumulative voting is by no means such an omnipotent mechanism as some scholars argue.