Are the transactions of affiliated companies legal?

Legal analysis: as the case may be. As long as it meets the requirements of the Company Law, the Securities Law and the Trading Rules of Listed Companies in Shenzhen and Shanghai on voting procedures and information disclosure, it is legal and compliant. On the contrary, unfair related party traders have to bear certain legal responsibilities. Unfair related party transaction refers to the substantive content of a specific related party transaction, mainly because the transaction result is unfair in essence, which is harmful to the relevant stakeholders of the transaction, especially the rights and interests of non-related parties involved in the transaction.

Legal basis: People's Republic of China (PRC) Company Law.

Article 216 The meanings of the following terms in this Law: (1) Senior management personnel refer to the managers, deputy managers, financial officers, secretary of the board of directors of listed companies and other personnel stipulated in the articles of association of the company. (2) Controlling shareholders refer to shareholders whose capital contribution accounts for more than 50% of the total capital of a limited liability company or whose shares account for more than 50% of the total share capital of a joint stock limited company; Although the capital contribution or the proportion of shares held is less than 50%, but according to their capital contribution or shares held, shareholders have enough voting rights to the shareholders' meeting and the resolutions of the shareholders' meeting. (3) "Actual controller" refers to a person who is not a shareholder of the company, but can actually control the company's behavior through investment relations, agreements or other arrangements. (4) Relationship refers to the relationship between the controlling shareholder, actual controller, directors, supervisors and senior managers of the company and the enterprises directly or indirectly controlled by them, as well as other relationships that may lead to the transfer of the company's interests. However, state-controlled enterprises are not related only because they are controlled by the state.

Article 21 The controlling shareholders, actual controllers, directors, supervisors and senior managers of a company shall not use their related relationships to harm the interests of the company. Anyone who violates the provisions of the preceding paragraph and causes losses to the company shall be liable for compensation.