The Study On The Implementing Effects Of Chinese Private Placement From The Perspective Of Tunneling And Company Performance

The implementation of the Policy of the new "Corporation Law", "Securities law" and "Measures for the Administration of Securities Issuance of Listed Companies" in 2006, not just restarted the equity of listed companies sealed nearly a year in China, but also opened the directional window of the refinancing for private placement financing. With the advantage of loose conditions, quick procedures and relatively low cost etc, private placements became the most preferred choice of Chinese listed companies, and also became the most mainstream refinancing mode.As a new financing mode, private placements have been implemented for only a short time, the laws and regulations have not yet been perfected, at the same time the domestic theoretical and empirical studies on private placements haven't formed a comparatively mature system as foreign studies. Through the empirical studies on the aspects of tunneling and company performance, this paper has comprehensively analyzed the price discount in private placement, related-party transaction, money occupying during the period of private placements.besides, by a more comprehensive financial index system, this paper has measured the long-term performance of the post-private placement of the listed company in China. Based on these researches, we can test the implementation effect of private placement in a reasonal sense. This study can ma-ke up the deficiency in domestic private placement study and is meaningful in both the theory and practice fields as well.The conclusions are as follow, the study on price discount in private placement and on the comparison of related-party transaction, money occupying before and after the placement shows that controlling shareholders'tunneling is existing. In addition, the paper finds that the long-term performance of the post-private placement of the listed company in China did not improve. These results show that private placement failed to achieve its due value in our country, because of the capital market mechanism and policy system background. Meanwhile, the paper also finds that the external investors plays a positive role in the supervision of the related-party transaction and money occupying behavior, but help little in the long-term performance of the listed company. At last, this paper gives some suggestions on the basis of the previous research.