On the Regulations of Circular Shareholdings
YU Ding-yong
LI Xiao-chun
Abstract：Company A owns stock in Company B. Company B owns stock in Company C. Coming full circle, Company C owns stock in Company A. This is what we call“circular shareholdings”. Based on the controllable relations of dependence, circular cross -shareholdings can be divided into ordinary type and heterogeneous type. As in-direct cross-shareholding, ordinary circular shareholding brings less negative effects, which lie in capital and insider trading, than the direct shareholding that happens in mother and subsidiary company. On the other side, because of the potential effect caused by direct cross-shareholding, heterogeneous cross-shareholding will have the same negative effect as direct cross-shareholding. Therefore, heterogeneous cross shareholding should be treated as direct cross shareholding, and more regulations on ordinary circular shareholding should be established and improved upon information disclosure and anti-monopoly law.
Keywords：cross-shareholdingcircularregulations
Publication Date：2014-01-01
Online Publishing Date：2025-08-15(First online date of this platform, not the publication date of the document)
Pages：7( 51-57 )