CHINA Law and Practice Contributed by: Lingyun Dai, Tao Liu, Xueyong Liao and Yuzhou Shang, Lifeng Partners
The management team of the target company gen - erally seeks robust exit protections. For institutional investors, they certainly do not wish for a minor share - holder or management to arbitrarily initiate a drag sale of the company. Therefore, they set high barriers for the exercise of drag and tag rights. 10.3 IPO The lock-up period arrangements for IPO exits must first comply with the regulations and requirements of the exchange. In China’s A-share market, the control - ling shareholders of listed companies are required to have a lock-up period of at least 36 months. For other shareholders, a lock-up period of at least 12 months is mandated. Secondly, in compliance with the regula - tions, private equity sellers typically agree to a lock-up period of 12 to 24 months. Both “relationship agreements” and private equity-led IPOs are rare in China.
121 CHAMBERS.COM
Powered by FlippingBook