Database Case: Nanjing Equity Investment Partnership v. Fang Moumou, Liang Moumou et al.
A buyback clause tied directly to the short-term secondary-market share price or market capitalization of a listed company disrupts securities-market order and harms the public interest, and is therefore invalid. Where a VAM-style buyback clause should have been cleared before listing but was concealed and undisclosed, investors cannot later enforce that clause after the company has gone public.
Holding
A buyback clause tied directly to the short-term secondary-market share price or market capitalization of a listed company disrupts securities-market order and harms the public interest, and is therefore invalid. Where a VAM-style buyback clause should have been cleared before listing but was concealed and undisclosed, investors cannot later enforce that clause after the company has gone public.