Core Points - The Supreme People's Court has released a draft interpretation regarding the application of the Company Law, specifically addressing key issues in corporate governance and establishing several red lines for listed companies [2] Group 1: Red Lines Established - Red Line 1: Companies may demand the return of excessive compensation, stock, or options from directors and executives if significant illegal activities, such as false financial reporting, are identified [3] - Red Line 2: Any guaranteed returns or disguised guarantees made by listed companies or their controlling shareholders to specific investors are not supported by law, and courts will uphold requests to invalidate such clauses [4] - Red Line 3: Financial assistance provided by listed companies to acquire shares of themselves or their parent companies, such as gifts, loans, or guarantees, can be declared invalid by the courts upon request [5] - Red Line 4: Agreements linked to market value, such as valuation adjustment agreements that stipulate buybacks or monetary compensation if certain market metrics are not met, will be deemed invalid by the courts [6]