The Empirical Research Of Private Offering Of Additional Shares Expropriation

Followed by the rapid growth of Private offering of additional shares, the problem of "Private offering of additional shares expropriation" becomes more and more severity when the Reform of non-tradable shares had started to perform.The behavior of expropriation not only seriously undermine the principle of the issuing of financing market,which is founded of "fair, open and fair",but also damage the interests of Minority shareholder,and even destroy the capital market's efficiency of allocation of resources. The article will found out the factors which is linked to the "Private offering of additional shares expropriation" by the empirical data. The study can help the Minority shareholder to distinguish the "Expropriation" companies, and provide a practical solution to the authorities for building up a good and a health capital market.The method of study is combined with the Theoretical and the Empirical. The main content of this article includes three parts. The first part establishes theoretical "profit and loss" model to explain the core reason for the "Private offering of additional shares expropriation",that is the Controlling shareholder can get the profit more easily than the institutional investors and the Minority shareholders. The second part involves empirical study on the 249 listed companies which perform the Private offering of additional shares around 2006 year to 2008 year. And then we use the depend T hypothesis testing and Logistical regression model to analyze the involved factors for the "expropriation". And we also prove the question that the "expropriation" will result to the deny the value after Private offering of additional shares. The last part will give some suggestions to help the authorities to solve the Private offering "expropriation" problem.The Empirical evidence shows that there is more severe "expropriation" problem in our capital markets, and harder to manage. The factor which is linked to the "expropriation" include the object to buy the issuing share, the application, the share structure, the slack of asset, the growth of listed companies and the inner-management of listed company. According to the result of Empirical, we give some suggestions to perfect the efficiency of Private offering, such as enhance the audit procedures and funds management, optimize the share structure, update the conditions of applying the Private offering of additional shares, strengthen the monitoring role of underwriter and introduction of professional managers.The primary contributions of the article are summarized as 4 parts:First, the object of study is the Private offering of additional shares, which is different from mainstream study, and it makes the conclusion more reality. Second, the study background is in our capital markets system. Third, this article introduces a new classification of interests in Theoretical model that match with the Private offering, instead of the mainstream classification which is the traded stockholders and non-traded ones. Four, the study also increased some new variables to enriching the "expropriation" indicator system, that including the object of offering, the use of funds, the underwriting system and so on.