In a company with concentrated equity,it is easier for the controlling shareholders to control the company based on their voting rights.Gaining private benefits of control can motivate the controlling shareholders to participate in the operation or supervision of the company,reducing agency costs,which may also harm the interests of the company or minor-ity shareholders.Equity concentration is the status quo of corporate governance in China.Regulation of controlling share-holders should base on the tradition and status quo that the ownership and control combined in China,achieving a balance between incentives and norms.The fiduciary duty of controlling shareholders originates from the analogous application of trust relationships in US case law,whose connotation is uncertain,inconsistent with the nature of self-interested exercise of equity.It is difficult to serve as a guiding principle for the boundary of the exercise of rights by controlling shareholders.The company law includes the controlling shareholders who actually carry out the company's affairs into the category of di-rectors,requiring them to have a duty of loyalty and diligence to the company,and requesting the controlling shareholders instructing directors and senior managers to bear joint and several liability,which bright controlling shareholders who act as operators and abuse control rights into the system of obligations and responsibilities of organic law.It can avoid the exces-sive or inadequate deterrence resulting from the unclear fiduciary duties rule.The provision that shareholders shall not a-buse their rights does not require shareholders to have fiduciary duties to the company or other shareholders,but requires shareholders not to exercise their shareholder rights beyond the boundaries of their rights,and not to harm the interests of the company or other shareholders.
fiduciary dutiesde facto directorsabuse of shareholder rights
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