Private Equity (PE) Type Of Analysis And Regulatory Corruption

Since the recovery of the Initial Public Offering of domestic A Stock Market, the raising volume of IPO reached930billion RMB, which is the top one in the worldwide stock market. However, contrasted with the extraordinarily high raising volume and the exceptional profit it brought to the issuers, the range of price drop of A Stock Market outran the western mature stock market. By the December of2011, the total volume of A Stock Market shrank by5.0838trillion RMB compared with the beginning of the2011. The circulation market volume shrank by2.89trillion RMB. The average loss of individual investor reaches42thousands RMB. Obviously, the domestic A Stock Market is the Waterloo of investor but the paradise of issuers.The Offering market of domestic Market is controlled by administration. The whole process of the IPO would last one year. The Corruption of Private Equity occurred in this procedure. The key workforce of the sponsor institution and the person having special relationship with the issuing enterprise suddenly invest and acquire the original issue stock before the IPO, sell the stock when the company is listed. The price difference is definitely considerable and insurable. This kind of transaction is covert and legal so that it exist in the IPO transaction for a long time. The exposure of Case "Xie Fenghua" and "Li Shaowu" draw the attention to this issue which is called "Corruption of Private Equity". With the sustained attention from media to the "PE Corruption ", a wide range of IPO-related transactions are known as" PE corruption ". But so far, the academic definition for "PE corruption", the hard caused to Stock Market, and effective regulatory Basic is still in the blank stage. This paper considers its definition is the basis for further research and necessary precondition for regulationWith the goal of reaching the scientific definition of "PE corruption", this article firstly introduces traditional PE. On this basis, combined with the actual situation in the Stock Market, I defined "PE corruption " with classification criteria and actors on the common behavior of the"PE corruption" typed. Meanwhile,"PE corruption "is closely related to securities companies’ direct investment+sponsor" model of reasonable supervision, combined with the stock market’s current regulatory background, were analyzed. To expect after the resumption of the IPO, control and even eliminate the occurrence of the "PE corruption ". So that the interests of small investors can be protected, and China’s securities market will develop healthy...