China Listed Companies Issuing New Shares On The Interests Of Shareholders

Seasoned equity offering (SEO) is the important way to optimize resources of market economy in the stock market and has become the prevailing refinancing way in foreign developed capital market with its rationality existing. With the change of the industry environment of our country, improvement of the supervision, SEO turns to be the first-selected refinancing of listed company of our country because of its intrinsic advantages. This article researches the influence of SEO on the shareholders' interests. And the result is: SEO makes the no-public shareholders' interests increase and public shareholders' interests decrease. Thus SEO turns into the information of "empty profits" of investors in the stock market Traced to the reason, it is because of the special equity structures of listed company in our country and the fact that our security market is lack of effective mechanism to protect the investors' benefit.Under the two-dimension equity structure, public shares and no-public shares coexist and have different ways to realize their interests. No-public shareholders realize their interests mainly through premium issue, net assets appreciation and money bonus. While for public shareholders, they can circulate their stocks at the secondary market and make them cashed at any time. The fluctuations of dividend and stock price are very critical, and they pay attention to the sustainable development and promotion of the listed company. SEO leads to the fact that no-public shareholders' wealth increase and public shareholders' reduce. Thus no-public shareholders incline to raise the price of SEO to make their stock wealth maximized.Because of special historical and systematical reasons, listed company forms the existing two-dimension equity structure. No-public shareholders (mainly state-owned shareholder), in the holding position, account for two-thirds of stock equity and are controlling holders; while no-public shareholders (minorityshareholders in main) account for only one-third of proportion of the whole equity, and disperse very much. The controlling stockholders of listed company of our country control the board of directors, manager's floor and the supervisory-board, and pass the proposal of SEO ignoring the minority shareholders' interests. Even in the course of the management of listed company, it takes place occasionally that the controlling shareholders infringe the minority stockholder's legitimate interests.Protecting the legitimate interests of the shareholders, especially that of the minority shareholders is the key for our security market to develop healthily. The controlling shareholders of listed company take advantage of their control over the company, and aggression the interests of the minority stockholders, which has something to do with the fact that the listed company of our country didn't reform completely, equity structure is unreasonable, the corporate government structure is imperfect, the laws and regulations are not perfect, etc. In order to protect the minority shareholder's legitimate interests in our country and guarantee the security market of our country to develop in a healthy way, we must take steps, improving the equity structure, amplifying the corporate government structure, perfecting the corresponding laws and regulations, and setting up effective mechanism of protection of minority stockholder's interests.