Analysis Of Related Transactions Of Repaying Debts With Non-cash Assets In Shenzhen Listed Companies

Now, many big shareholders are impropriating large amounts of capital of listed companies. Some shareholders are even impropriating more than one billion RMB. And many of them repay the debts with some non-cash assets. Then there are some problems. How much are the repaid assets worth? Are the trading price and evaluating price fair? Why do listed companies have related transactions of repaying debts with non-cash assets? Maybe there are some motives, such as earnings management, capital transfer. What effect do the related transactions have on the listed companies? What listed companies will have such transactions?This thesis analyzes the related transactions of repaying debts with non-cash assets in Shenzhen listed companies between 1998 and 2002. We find that there is a clear motive when having the related transactions: capital transfer or earnings management. We find 84 samples that have the related transactions. After descriptive statistics and empirical research, we find that the motive of the related transactions is capital transfer if the repaying assets are transferred in from big shareholders, brother companies, or related parties having the same important person as the listed companies. Brother companies are the companies having the same mother companies as the listed companies. The performance of such listed companies will come down in this year or the next year. The motive of other related transactions is earnings management. The performance of such listed companies will not come down in this year or the next year. If the listed companies have the related transactions of repaying debts with non-cash assets with big shareholders, brother companies, or related parties having the same important person as the listed companies, if the change of main operating income ratio is worse, if the listed companies do not change their biggest shareholders, the change of ROA will be worse. If the amount of the related transactions is larger, if the change of ROA is worse, it is more likely that the listed companies will change the biggest shareholders. What listed companies will have the related transactions of repaying debts with non-cash assets? We find that the performance of the listed companies who have the related transactions will come down the last year if the repaying assets are transferred in from big shareholders, brother companies, or related parties having the same important person as the listed companies. The performance of the other companies who have the related transactions will not come down the last year. If the change of debt ratio is worse, if the listed companies have the related transactions of repaying debts with non-cash assets with big shareholders, brother companies, or related parties having the same important person as the listed companies, if shares property of the biggest shareholders is state-owned, it is more likely that the listed companies will have the related transactions that non-cash assets are transferred in. If the change of debt ratio is worse, if the listed companies have the related transactions of repaying debts with non-cash assets with big shareholders, brother companies, or related parties having the same important person as the listed companies, if big shareholders impropriate more capital, the amount of the related transactions will be larger...