Property Valuation And Large Shareholder Benefits Transport Of The Listed Company

Under the ownership structure with large shareholders exists, the primary agency problem is the interest conflict between large shareholders and minority shareholders. Plenty of researches show that large shareholders have the incentive and ability to expropriate minority shareholder, by means of related transaction, funds embezzlement, cash dividends, merge and acquisition. In the process of assets transaction such as assets reorganizing, swapping, the outcomes of valuation are often used as the pricing benchmark. However, as the special institution backgrounds of Chinese valuation come into being, the independency of valuation have innate defects. The appraisal firms are impressionable to stakeholders and make biased appraisal. What cause valuation bias? what roles the stakeholders as large shareholders play in the process? whether the capital market detect valuation bias? These questions are the object of this paper.With a hand-collected sample based on the appraisal reports disclosed by companies listed in Shanghai and Shenzhen Securities Exchange from 2000 to 2003 when affairs such as assets purchasing, disposing, swapping and investing have taken place, the empirical study finds that:(1) When the listed company purchases assets from large shareholder, the abnormal valuation increment ratio is higher than other occasions. On the other hand, when the listed company sells assets from large shareholders, the abnormal valuation increment ratio is lower than other occasions. When the principal is the buyer, the bias is downwards. While the principal is the seller, the bias is upwards. (2) The capital market can detect the disadvantages of valuation bias. The higher the abnormal valuation increment ratio, the lower the cumulative abnormal return.The results of the paper indicate that large shareholders tunnel resource from listed company by manipulating the valuation outcome of related transactions, which provides the direct evidence on large shareholders'tunneling via related transaction. Moreover, the paper finds the evidence that stakeholders besides large shareholders of transaction intervene the valuation outcome.