Core Viewpoint - The Supreme People's Court has released a draft interpretation of the Company Law, introducing ten special provisions aimed at addressing key issues in corporate governance, including the recovery of illegal compensation, the validity of commitments, and regulations on anti-takeover measures, which will have a profound impact on the capital market [1][2]. Group 1: Recovery of Illegal Compensation - Companies can demand the return of excessive compensation, stock, or options from directors and senior executives if there are significant violations such as false financial reporting [4][5]. - This provision aims to deter executives from engaging in fraudulent activities to inflate company performance for personal gain, as they may face significant financial repercussions [4][5]. - The enforcement of this rule is expected to reduce the likelihood of financial fraud among listed companies, as the penalties for such actions have become more severe [5]. Group 2: Invalid Commitments - The draft specifies that certain commitments made by companies, such as guaranteed returns on private placements, will be deemed invalid, aligning with the regulatory spirit of prohibiting profit transfer [9][10]. - Financial assistance provided by companies to obtain shares will also be invalidated, which is intended to prevent unfair practices that harm minority shareholders [10]. - Agreements linked to market value, such as buyback clauses or compensation agreements, will be rendered ineffective, further reducing the risk of stock price manipulation [12][13][14]. Group 3: Anti-Takeover Measures - New regulations have been introduced to prevent companies from improperly restricting shareholder rights or excluding specific individuals from holding positions through amendments to company bylaws [16][18]. - This aims to enhance corporate governance and protect the rights of minority investors, particularly in cases where companies are controlled by a few individuals [18]. Group 4: Additional Key Provisions - The draft includes provisions regarding the handling of pledged shares during performance commitments and the validity of major asset transaction contracts that lack shareholder approval [20][21]. - It clarifies the effectiveness of bondholder meeting resolutions and the litigation status of trustees in cases of default, ensuring better protection for bondholders [22][23].