The Research On The Entrusting For Financing Of China's Listed Companies

The entrusting for financing of China's listed companies were emerged in 1993 and spread widely in recent years. There were many problems and contradictories in the entrusting for financing practices of China's listed companies. It affects those listed companies who carried out the entrusting for financing business in achievement, reputation, honest and exerted a bad influence in our security market.As things are at the moment, we did not have a unified conclusion on the character and advantage or disadvantage of the entrusting for financing both in theory and practice. It's very difficult to classify it to any exactly business that was existed in theories or practices.We think that the entrusting for financing business is an product of the finance & invest famine phenomenon in our capital market. The entrusting for financing business reflects the deficiency of China' s listed companies' finance & invest mechanism. In one hand, because of the abnormal financing structure and excessive stock financing, the entrusting for financing were interrelated with financing behavior. In the other hand, the utilization of raised money lacked target and the most typical case was the financing behavior and entrusting for financing behavior existed side by side. We think the reasons are the four follow limit lacks such as the limit lack of financing cost, the limit lack of security market mechanism, the limit lack of listed companies' honest and the limit lack of corporation governance.Through analyzing the case of SiChuan ChangHong company's financing and entrusting for financing and the practices of China's listed companies, we pose some advices to standardize the entrusting for financing business of China's listed companies including strengthening corporation governance, standardizing the business of asset management, consummating China enterprise bond market, introducing shelfissue mechanism and establishing internal risk system.