The Explore On Tunneling In Asset-Injecting By Private Of Equity

Since the share-split reform of listed companies, the enthusiasm of assets-injecting by major shareholders has greatly increased, and private placements of equity has become the main mode of assets-injecting. But the rights asymmetry and information asymmetry between the major shareholders and minority shareholders of the listed companies are naturally existed, major shareholders are the main controller and operator while minority shareholders are disadvantaged. Assets-injecting by private placement of equity between the listed company and major shareholders is a double connection transaction process. Are the assets which major shareholders inject into the listed company really good quality assets? Will major shareholders control asset appraisal process, increase the value of the injected assets in the double connection transaction to violate the interests of listed companies and the minority shareholders? Do major shareholders tunnel or prop the listed companies? Different with the previous studies, this paper explores the tunneling in assets-injecting by private placement of equity based on the perspective of asset evaluation, and try to answer those questions above. This paper has some significance of innovation.Based on the agency theory of major shareholders and minority shareholders, the information asymmetry theory and the tunneling and propping theory of major shareholders, this paper analyses the relationship between assets-injecting by private placements of equity and tunneling, the relationship between the increase rate of asset evaluation and the tunneling, and the relationship between the increase rate of asset evaluation and the shareholders'wealth. This paper draws a conclusion that tunneling exists in assets-injecting by private placements of equity, and major shareholders do prop the listed companies.additionally-issued directional asset injection and interests and the relationship between the transmission rate and asset appraisal of stockholder wealth, conveying, interest, concludes that the listed companies issuing directional asset injection process of conveying, and is the interests of shareholders to the interests of the listed company, the shareholders that transport support listed company. The directional shares listed companies in China, the main purpose is to solve the spin-off of the listed problem left over by history. The listed companies issuing into major shareholders by directional asset can be constructed, and the quality of the complete industry chain, broaden the downstream enterprises boundary, also conduce to reduce transaction costs and achieve efficient allocation of resources.On the other hand, it can reduce the major shareholders and their affiliates and between the listed company's affiliate transaction, to avoid competition, further improve the listed companies' independence and continuous operation ability, The good performance of listed companies is the fundamental source of profit big shareholders, big shareholders have power will inject listed company; quality assets. Shares in the major shareholders are strongly enhance company during the market value of the intrinsic motivation. And assets evaluation directly affect the value of assets to infuse, assets appraisal can become one of the important tache be manipulated. Controlling shareholders to inject the assets quality of listed companies, relative to the motives controlling shareholder, increasing shareholder value into the virtual assets are less likely. Virtual assets value increases, causes the decrease of shareholders' wealth.This paper chooses the listed companies which complete the assets-injecting by private placements of equity from January 1,2006 to December 31,2009 in the A-stock-market as samples, and make the empirical analysis using the increase rate of asset evaluation as the variable of tunneling. The empirical results are as follows. In the process of controlling shareholders directional shares into the assets evaluation rate is less than the controlling shareholder injection rate and asset assessment scale of company assets evaluation results for the prudent, directional asset injection rarely occur in additional transfer control behavior. Inject assets evaluation, the higher the rate of total market investors excess returns (CAR). This major shareholders in directional shares of listed companies in the process to inject the purpose is to obtain long-term assets to the interests of shareholders, and large listed company, namely into quality assets major shareholders prop the listed companies. The higher of asset increasing rate, the less of shareholders' wealth.