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Protecting Investors in ChinaThe table below provides a <strong>full</strong> breakdown of how the disclosure, director liability, and shareholder suits indexes are calculatedin China.Protecting Investors Data (2007)IndicatorDisclosure Index 10What corporate body provides legally sufficient approval for the transaction? (0-3; see notes) 3Immediate disclosure to the public and/or shareholders (0-2; see notes) 2Disclosures in published periodic filings (0-2; see notes) 2Disclosures by Mr. James to board of directors (0-2; see notes) 2Requirement that an external body review the transaction before it takes place (0=no, 1=yes) 1Director Liability Index 1Shareholder plaintiff's ability to hold Mr. James liable for damage the Buyer-Seller transaction causes tothe company. (0-2; see notes)Shareholder plaintiff's ability to hold the approving body (the CEO or board of directors) liable for fordamage to the company. (0-2; see notes)Whether a court can void the transaction upon a successful claim by a shareholder plaintiff (0-2; seenotes)Whether Mr. James pays damages for the harm caused to the company upon a successful claim by theshareholder plaintiff (0=no, 1=yes)Whether Mr. James repays profits made from the transaction upon a successful claim by theshareholder plaintiff (0=no, 1=yes)00000Whether fines and imprisonment can be applied against Mr. James (0=no, 1=yes) 0Shareholder plaintiff's ability to sue directly or derivatively for damage the transaction causes to thecompany (0-1; see notes)1Shareholder Suits Index 4Documents available to the plaintiff from the defendant and witnesses during trial (0-4; see notes) 0Ability of plaintiffs to directly question the defendant and witnesses during trial (0-2; see notes) 2Plaintiff can request categories of documents from the defendant without identifying specific ones (0=no,1=yes)Shareholders owning 10% or less of Buyer's shares can request an inspector investigate the transaction(0=no, 1=yes)00Level of proof required for civil suits is lower than that for criminal cases (0=no, 1=yes) 1Shareholders owning 10% or less of Buyer's shares can inspect transaction documents before filing suit(0=no, 1=yes)176
Investor Protection Index 5.0Notes:Extent of Disclosure IndexWhat corporate body provides legally sufficient approval for the transaction?0=CEO or managing director alone; 1=shareholders or board of directors vote and Mr. James can vote; 2=board of directorsvotes and Mr. James cannot vote; 3 = shareholders vote and Mr. James cannot voteImmediate disclosure to the public and/or shareholders0=none; 1=disclosure on the transaction only; 2=disclosure on the transaction and Mr. James' conflict of interestDisclosures in published periodic filings0=none; 1=disclosure on the transaction only; 2=disclosure on the transaction and Mr. James' conflict of interestDisclosures by Mr. James to board of directors0=none; 1=existence of a conflict without any specifics; 2= <strong>full</strong> disclosure of all material factsDirector Liability IndexShareholder plaintiff’s ability to hold Mr. James liable for damage the Buyer-Seller transaction causes to the company0= Mr. James is not liable or liable only if he acted fraudulently or in bad faith; 1= Mr. James is liable if he influenced theapproval or was negligent; 2= Mr. James is liable if the transaction was unfair, oppressive or prejudicial to minorityshareholdersShareholder plaintiff’s ability to hold the approving body (the CEO or board of directors) liable for for damage to the company0=members of the approving body are either not liable or liable only if they acted fraudulently or in bad faith; 1=liable fornegligence in the approval of the transaction; 2=liable if the transaction is unfair, oppressive, or prejudicial to minorityshareholdersWhether a court can void the transaction upon a successful claim by a shareholder plaintiff0=rescission is unavailable or available only in case of Seller's fraud or bad faith; 1=available when the transaction isoppressive or prejudicial to minority shareholders; 2=available when the transaction is unfair or entails a conflict of interestShareholder plaintiffs’ ability to sue directly or derivatively for damage the transaction causes to the company0=not available; 1=direct or derivative suit available for shareholders holding 10% of share capital or lessShareholder Suits IndexDocuments available to the plaintiff from the defendant and witnesses during trailScore 1 each for (1) information that the defendant has indicated he intends to rely on for his defense; (2) information thatdirectly proves specific facts in the plaintiff’s claim; (3) any information that is relevant to the subject matter of the claim; and(4) any information that may lead to the discovery of relevant information.Ability of plaintiffs to directly question the defendant and witnesses during trial0=no; 1=yes, with prior approval by the court of the questions posed; 2=yes, without prior approval77
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China
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© 2007 The International Bank for
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IntroductionDoing Business 2008 is
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9. In China, a new property law put
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Summary of Indicators - ChinaStarti
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Starting a Business in China: Entry
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3. Steps to Starting a Business in
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The following table shows Starting
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1. Historical data: Dealing with Li
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13. Review of construction drawings
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The following table shows Dealing w
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1. Historical data: Employing Worke
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The following table shows Employing
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1. Historical data: Registering Pro
Page 30 and 31: 4. Benchmarking Registering Propert
Page 32 and 33: Getting Credit in China: Legal Righ
Page 34 and 35: 3. Benchmarking Getting Credit Regu
Page 36 and 37: Protecting Investors in ChinaOffici
Page 38 and 39: 3. Benchmarking Protecting Investor
Page 40 and 41: Paying Taxes: Tax Payable and Compl
Page 42 and 43: 3. Benchmarking Paying Taxes Regula
Page 44 and 45: Trading Across Borders: Importing a
Page 46 and 47: 3. Benchmarking Trading Across Bord
Page 48 and 49: Enforcing Contracts: Court Efficien
Page 50 and 51: 3. Benchmarking Enforcing Contracts
Page 52 and 53: Closing Business in China: Bankrupt
Page 54 and 55: 3. Benchmarking Closing Business Re
Page 56 and 57: APPENDICESStarting a Business in Ch
Page 58 and 59: - Appointment documents and identif
Page 60 and 61: Cost to complete:Comment:no chargeA
Page 62 and 63: 14 *Receive review of building draw
Page 64 and 65: Procedure1Request and obtain approv
Page 66 and 67: Comment:Procedure6The Shanghai Hous
Page 68 and 69: Procedure14Receive review of buildi
Page 70 and 71: Comment:No time limits apply for in
Page 72 and 73: 建建建建建建建建建
Page 74 and 75: Employing Workers in ChinaEmploying
Page 76 and 77: Registering Property in ChinaThis t
Page 78 and 79: Procedure3(v) Photocopy of the iden
Page 82 and 83: Paying Taxes in ChinaThe table belo
Page 84 and 85: Trading Across Borders in ChinaThes
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