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The Protection of Minority Shareholders in Vietnam, Thailand and Malaysia
Schriften zum Wirtschaftsrecht, Vol. 263
(2014)
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Susanne Olberg studierte Jura, Kulturwissenschaften (B.A.) und Japanologie (M.A.) in Berlin, Frankfurt (Oder), Marburg und Tokio. Im Anschluss an ihr Referendariat am Landgericht Marburg – mit Stationen in Frankfurt a.M. und Peking – arbeitete sie als wissenschaftliche Mitarbeiterin an der Humboldt-Universität zu Berlin. Im Rahmen ihrer Promotion verbrachte sie Forschungsaufenthalte am Institute of State and Law, Hanoi, Thammasat University, Bangkok, und International Islamic University Malaysia, Kuala Lumpur. Anschließend trat sie in den höheren Dienst des Auswärtigen Amtes ein.Susanne Olberg studied law, cultural sciences and Japanese studies in Berlin, Frankfurt (Oder), Marburg and Tokyo. During her legal clerkship at the Marburg Regional Court, she worked at an international law firm in Frankfurt am Main and for the GIZ in Beijing. Following to her Second State Examination in law (bar exam), she worked as a research assistant at the Humboldt-University Berlin and was a visiting fellow at the Institute of State and Law in Hanoi, at the Thammasat University in Bangkok, and the International Islamic University Malaysia in Kuala Lumpur. After finishing her PhD thesis she joined the German Federal Foreign Office.Abstract
In ihrer rechtsvergleichend angelegten Arbeit untersucht die Verfasserin den Schutz von Minderheitenaktionären in Vietnam, Thailand und Malaysia sowohl auf der Ebene der gesetzlichen Regelungen als auch auf der Ebene ihrer tatsächlichen Wirkung. Ziel der Arbeit ist es, einen Einblick in die tatsächliche Funktionsweise des Unternehmens- und Gesellschaftsrechts zu ermöglichen. Gestützt auf die Ergebnisse ihrer Feldforschung zeigt die Autorin, dass sich die Rechtsregelungen in den drei Jurisdiktionen auf dem Papier zwar denjenigen der USA annähern, zwischen dem »law in the books« und dem »law in action« jedoch ein erheblicher Unterschied besteht, dessen Ausmaß vom jeweiligen lokalen Kontext bestimmt wird. Die Autorin zeigt auf, dass sich die Mechanismen, die dem Schutz von Minderheitenaktionären dienen, in allen drei Jurisdiktionen trotz der erheblichen Unterschiede im lokalen Kontext ähnlichen Schwierigkeiten ausgesetzt sehen. Der Schutz von Minderheitenaktionären erweist sich im Ergebnis als ein öffentliches Gut, der in Anbetracht einer mangelnden Kontrolle durch den Kapitalmarkt auf stattliche Durchsetzung angewiesen ist und damit nicht nur Reformen der corporate governance, sondern auch der public governance voraussetzt.In her comparative analysis of the protection of minority shareholders in Vietnam, Thailand and Malaysia, the author first compares the law-on-the-books, then evaluates which informal rules and enforcement characteristics determine the protection of minority shareholders in each country, and finally compares these factors and their impact. The analysis of the formal rules aiming to protect minority shareholders in the three countries shows that a conversion towards the Anglo-American concept of corporate law is taking place. However, in all three jurisdictions, there is a gap between the »law in the books« and the »law in action« although the degree of this gap depends on the local context. Although the local context is very different in the three countries for various reasons, the legal devices to protect minority shareholders face similar problems in all three jurisdictions. In sum, monitoring of corporations - and thus the protection of minority shareholders - remains a public good. Due to the lack of control by a fully developed capital market, public enforcement remains a key issue. The author therefore concludes that in all three countries, further improvement of corporate governance requires reforms of public governance.
Table of Contents
| Section Title | Page | Action | Price |
|---|---|---|---|
| Table of Contents | 5 | ||
| List of Tables and Figures | 8 | ||
| A. Theoretical and Methodological Framework | 11 | ||
| I. Introduction | 11 | ||
| II. Definition of Terms | 13 | ||
| III. Methodological Approach | 15 | ||
| 1. Functional Comparative Law | 15 | ||
| 2. New Institutional Economics | 16 | ||
| IV. The Conflict Between Majority and Minority Shareholders | 19 | ||
| 1. The Principal-Agent Approach | 19 | ||
| 2. Incomplete Contracts, Information Asymmetry and Opportunism | 21 | ||
| 3. Private Benefits of Control | 22 | ||
| V. The Legal Protection of Minority Shareholders | 23 | ||
| 1. Convergence Towards the Anglo-American Model of Corporate Law? | 23 | ||
| 2. The Legal Devices Protecting Minority Shareholders | 24 | ||
| VI. The Factual Protection of Minority Shareholders | 28 | ||
| 1. Incentives for the Expropriation of Minority Shareholders | 28 | ||
| 2. Constraints on the Expropriation of Minority Shareholders | 30 | ||
| a) Shareholder Activism | 30 | ||
| b) Independent Directors | 33 | ||
| c) Gatekeepers | 37 | ||
| d) External Product Market Competition | 39 | ||
| e) Control by the Capital Market | 40 | ||
| f) Private and Public Enforcement | 41 | ||
| g) Labor | 42 | ||
| h) Moral and Reputational Concerns | 43 | ||
| i) Internal Corporate Governance Practices | 43 | ||
| 3. Conclusions | 44 | ||
| VII. Empirical Research | 44 | ||
| B. The Legal Protection of Minority Shareholders in Vietnam, Thailand and Malaysia | 48 | ||
| I. Sources of Law | 48 | ||
| II. A Comparative Legal Analysis | 49 | ||
| 1. Minority Shareholder Appointment Rights | 49 | ||
| 2. Minority Shareholder Decision and Action Rights | 52 | ||
| 3. Independent Directors | 57 | ||
| 4. Equal Treatment | 59 | ||
| 5. Constraints and Affiliation Rights | 60 | ||
| 6. Takeovers | 63 | ||
| 7. Delisting | 65 | ||
| III. Conclusions | 65 | ||
| C. The Factual Protection of Minority Shareholders in Vietnam, Thailand and Malaysia | 69 | ||
| I. Vietnam | 69 | ||
| 1. Features of the Vietnamese Corporate Landscape | 69 | ||
| a) Restructuring State-Owned Enterprises | 71 | ||
| b) General Corporations | 73 | ||
| c) Economic Groups | 76 | ||
| d) Equitization of SOEs | 78 | ||
| e) The State Capital Investment Corporation | 84 | ||
| f) Ownership Structure and Means of Control | 87 | ||
| aa) Ownership Structure in Equitized Companies | 87 | ||
| bb) Ownership and Control in Private Shareholding Companies | 93 | ||
| cc) Means of Control | 95 | ||
| 2. Capital Market and Investors’ Base | 96 | ||
| 3. Internal Corporate Governance Practices | 102 | ||
| 4. Shareholder Activism | 107 | ||
| 5. Foreign Investment | 110 | ||
| 6. Gatekeepers | 112 | ||
| 7. Public and Private Enforcement | 114 | ||
| 8. Implications for the Legal Protection of Minority Shareholders | 121 | ||
| a) Minority Shareholder Appointment and Decision Rights | 121 | ||
| b) Independent Directors and Equal Treatment | 124 | ||
| c) Constraints and Affiliation Rights | 125 | ||
| 9. Summary | 125 | ||
| II. Thailand | 127 | ||
| 1. The State-Party-Business Nexus | 127 | ||
| 2. Features of the Thai Corporate Sector | 135 | ||
| a) Thai Corporations and Ethnicity | 135 | ||
| b) Ownership Structure | 138 | ||
| c) Control of Companies | 147 | ||
| d) State-Owned Enterprises | 151 | ||
| 3. The Capital Market and Investors’ Base | 154 | ||
| 4. Internal Corporate Governance Practices | 161 | ||
| 5. Shareholder Activism | 168 | ||
| 6. Foreign Investors | 173 | ||
| 7. Gatekeepers | 177 | ||
| 8. Public and Private Enforcement | 180 | ||
| 9. Implications for the Legal Protection of Minority Shareholders | 187 | ||
| a) Minority Shareholder Appointment and Decision Rights | 187 | ||
| b) Independent Directors and Equal Treatment | 188 | ||
| c) Constraints and Affiliation Rights | 191 | ||
| 10. Conclusions | 193 | ||
| III. Malaysia | 196 | ||
| 1. The State-Party-Business Nexus | 196 | ||
| 2. Features of the Malaysian Corporate Sector | 210 | ||
| a) The State as Owner, Shareholder and Investor | 210 | ||
| b) Ownership Structure and Means of Control | 214 | ||
| 3. The capital market | 220 | ||
| 4. Internal Corporate Governance Practices | 226 | ||
| 5. Shareholders’ Activism | 231 | ||
| 6. Gatekeepers | 235 | ||
| 7. Public and Private Enforcement | 237 | ||
| 8. Implications for the Legal Protection of Minority Shareholders | 243 | ||
| a) Minority Shareholder Appointment and Decision Rights | 243 | ||
| b) Independent Directors and Equal Treatment | 244 | ||
| 9. Conclusions | 247 | ||
| D. Summary and Conclusions | 250 | ||
| I. The Case of Thailand | 250 | ||
| II. The Case of Malaysia | 252 | ||
| III. The Case of Vietnam | 255 | ||
| IV. General Conclusions: Monitoring as a Public Good | 257 | ||
| Appendices | 261 | ||
| Bibliography | 265 | ||
| Subject Index | 288 |