A Study On The Non-marketization Of M&As And Restructuring Of Listed Companies And Supervision In Chinese Capital Market

Comparing mature capital markets with our capital markets, the biggestdifference in M&A and Restructuring is that the majority of the former is aim toachieve the effect of "1+1>2" Which essentially is an independent market-orientedbehavior of enterprise, But the latter are mostly based on the keep of the qualificationsof listed companies to achieve the goal of refinancing whose end goal is benefitstransfer and redistribution and has the typical characteristics of Non-marketization.. Inrecent years, as a main way of M&A and Restructuring in China’s capital market,holistic listing essence is still a unilateral assets placement behavior and its goals is torealize asset securitization and its motivation is deriving from the high valuation ofChina’s capital market listed companies assets and equity and the irrational pursuit ofthe M&A and Restructuring on secondary market. The above-mentionedcharacteristics of M&A and Restructuring in China’s capital market not only destroythe functions of the capital market resources optimal allocation, seriously underminethe market order, reduce the efficiency of supervision and poison the culture of themarket, but also trigger a large number of financial fraud, insider trading, benefitstransfer and market manipulation and other illegal acts. Based on this, this paperanalysis the unique phenomenon of China’s capital market M&A and Restructuringfrom the perspective of securities regulators, then explain it systematically andattempt to resolve the existing problems of M&A and Restructuring in China’s capitalmarket which has a very important theoretical and practical significance.This paper is in light of the following train of thought: raising the questionâ†'two features of M&A and Restructuringâ†'manifestations of non-marketizationâ†'motivation analysis of non-marketizationâ†'macro and micro empirical analysis onnon-marketizationâ†'regulatory status quo and problems of M&A and restructuringâ†'System reconstructionâ†'regulatory proposal.This paper adopts the combination of qualitative and quantitative analysismethods, and normal and empirical analysis methods. Based on the theorical analysisfor the theory of M&A and Restructuring, this paper studys manifestations ofnon-marketization M&A and Restructuring, the causes, the problems and the solutions.The dissertation consists of six parts: the first part (Chapters I and II) describesthe research background, research purpose and meaning, terms definition, anddomestic and international literature review. The second part (Chapter III) elaboratetwo distinct characteristics of M&A and Restructuring of China’s listed companies:the main driving factors "policy-induced" and typical non-market characteristicsunder the trend of gradually market-oriented course. The third part (Chapter IV,Chapter V) divide the non-market M&A and Restructuring into four main types:underperformance companies (ST) type，Back Door Listing type, related partytransactions type and government-led type and proposed the "demand hierarchy"motivation hypothesis of China’s listed companies M&A and Restructuring referencefrom Maslow’s demand hierarchy theory. Base on the basis, the theses analyzes thespecific reasons of non-marketization of M&A and Restructuring. Then, the paperdiscusses the problems existing in the course of non-marketization M&A andRestructuring from the macro and micro aspects and analyzes the characteristics andproblems existing taking three typical cases for examples. Part IV (Chapter VI) brieflyexplains the present supervision situation of our listed company M&A andRestructuring and based on this, analyzes the regulatory problems of our listedcompanies M&A and Restructuring from system design and law enforcement aspects.Part V (Chapters VII and VIII) put forward and expounded the overall idea of themarket-oriented supervision and the differentiation supervision strategy, include theidea and goal and the principle. Again, the paper put forward the correspondingsystem reconstruction and the M&A and Restructuring supervision system design andsupporting system construction. Finally, the dissertation discusses the regulation ofkey aspects of our country listed company M&A and Restructuring from severalaspects which include the agencies, insider trading, integrity and profit forecast andcommitment and so on. Part VI is conclusion.Through the analysis and discussion above, the dissertation arrives at severalconclusions as follow:(1)China’s securities market are brought out of the historical background that thetransformation from planning economy to market economy and the lack and shortcomings of related institutional and regulatory policies lead to China’s capitalmarket M&A and Restructuring present a typical "asymptotic marketization trend ofdominant non-marketization" feature.(2)Similar with the Maslow’s needs hierarchy theory, our country listed companyM&A and Restructuring has a typical "hierarchy needs" motivation and can bedivided into: survival needs, standard need, political need and growing need andmonopoly need in detail. Among these needs, the first three needs for M&A andRestructuring in our country at present are the main motivations which havenon-marketization features.(3)In view of the characters of each plate of multi-level capital market in Chinaand the objective background of China’s economic transformation, the differentialregulation style of our listed companies M&A and Restructuring can be implementedwhich include regulatory regime and regulatory policy. That is to say, in theregulatory regime aspect, GEM and small and medium-sized board which mainlymake up by private enterprises should implement the principle of "deregulation,strengthen supervision" to go on with the market-oriented M&A and Restructuringregulatory style. In motherboards market, existing regulatory approach should be stillused and realize market-oriented M&A and Restructuring progressively. In theregulatory policies, preferential treatment should be given to such M&A andRestructuring in favor of industrial restructuring and upgrading and enhancing thesynergies effects of M&A and Restructuring. Back Door Listing and othernon-marketization M&A and Restructuring should be restricted from the systemdesign and monitor and supervision aspects and turn China’s listed companies M&Aand Restructuring to market-oriented ones.(4)M&A and Restructuring of China’s capital market also has an importantfeature—"the policy induced", that is to say the majority of practice of M&A andRestructuring is "induced" by the policy."The trouble should end it", we must reviewcomprehensively the regulatory philosophy of M&A and Restructuring of China’slisted companies and solve the problems of flow direction of resources while solve theproblem of resource flows and change from the emphasis on financing scale tofocusing on financing efficiency and promote market-oriented M&A and Restructuring comprehensively. We should improve the level and quality M&A andRestructuring comprehensively. We also should establish the concept of "maintenanceof stability should be sparse not block". based on the basis above, we put forward aseries of improvements countermeasures for M&A and Restructuring as follow:â‘ R eform the backdoor system based on the principle " the front door are equivalentto the back door";â‘¡Reform resuming listing system accordance with the principle"The first time, again unanimously";â‘¢Reform the delisting system accordance withthe principle " the exports are equivalent to the entrance";â‘£R eform thebankruptcyreorganization system accordance with the principle "bankruptcy delisting separation";⑤Learn the lessons from "separate after long time united, united after long timeseparate" and improve the overall listing system.(5)The supervision regulatory oversight boundary of the M&A and Restructuringshould be clarified as soon as possible and administrative intervention should begradually reduced and the intermediary and self-discipline organizations should begiven full play to the supervision role such as sponsor, financial advisers, auditor,evaluator and lawyers and in M&A and Restructuring activities and we shouldpromote its "position responsible", gradually formed a "self-discipline as thefoundation, the government supervision as the leading, intermediary supervision asauxiliary" regulatory structure. At the same time, we should monitor the behaviorssuch as insider trading, not faith, the false information and not abide by commitmentin the course of M&A and Restructuring.