Analysis Of Interesting Conflict And Coordination For Listed Companies' Private Placement

Since the China Securities Regulatory Commission issued"the issuance of listed companies' management approach" on May 8,2006,financing function of the capital market became to recover, and private placement became the desirable choice of listed companies .Because of its low request ,simple rule,low coasts,and short cycle,private placement is adopted quickly as a primary option of re-financing for listed companies.However,private placement will significantly impact the wealth redistribution between the shareholders.Because of the pricing mechanism flaw and lacking of supervision experience ,some unfair tunneling events occur in the prance,which has not only caused a detrimental effect on listed companies, but also expropriate minority shareholders' interests.Firstly,the paper states the characters of private placement, development status in China ,and working conditions in international mature markets, then compares difference with other means of equity financing ,and summarize its competitive advantages.Secondly,the paper analyzes the wealth redistribution effect in private placement.In the wealth redistribution model,it is found that private placement increases new shareholders' wealth,and decrease the original shareholders' wealth.The paper thus summarize the sorts of interested parties in reality.Thirdly,the paper discusses the positive impact of interested parties ,which as benefit basis in private placement.The paper thus evaluates the motivations of related part under the wealth redistribution effect.Finally,the paper give some targeted interest co-ordinating approach for related part in private placement,and then consider interest protection for vulnerable investor in private placement.