The Problems And Solutions For Hunan Nonferrous Metals Group's Centralized Management Of Funds

U.S. sub-prime financial crisis broke out,it triggered a new wave of mergers and acquisitions. More emphasis has been put onto the capital security of financial management business. The concept "cash is king" has been repeatedly brought by entrepreneurs. For mangement of fund and to use it effectively, centralized management is effective management. Centralized management of funds can reduce the corporate cost of capital to enhance corporate value, so as to control financial risk. In this paper, we start from the basis of the centralized management theory, based on principal-agent theory, asymmetric information theory, the internal capital market theory, transaction cost theory, we discussed the necessity and feasibility of centralized management. We compared centralized management of funds and the use of five major mode,pointed out that settlement and finance companies are the current common patterns of executing centralized management. Combined with the specific circumstances of Hunan Nonferrous Metals Group, in particular the current status and problems, we present that to solve the current financial problems, we need to cooperate with the companies and unlisted companies and bank financial institutions, and execute the solution of "settlement center+internal bank "。We futher discussed that to execute the compound solution properly, it is the key that great attention must be put to the strenghtening of internal infrastrucuture which includes the fulfillment of the structure of organisation and regulation, training of personnel and the establiment of an effective network of communication.