The Research On Large Shareholder Control To Private Placement

Since May8,2006, the listed company securities issuance (SFC Decree30) issued by the ChinaSecurities Regulatory Commission, the capital market financing function is restarted. And after equitydivision reform, capital market financing function divide into "three-step" strategy, in which the first step isto restore pressure increase immediate expansion of the private placement and the refinancing of long-termequity warrants, since then, the private placement become an institutional financing initiatives, and rapiddevelopment. September17,2007.the China Securities Regulatory Commission promulgated the Listednon-public offering of shares to the implementation details, and further provides the behavior of listedcompany non-public offering stock. Although Private placement help enterprises to achieve financing at alower cost, and helps enterprises achieve the overall market,and will not increase the expansion of thestock market spot, and also helping to consolidate the control of large shareholders. Therefore, we study thedecision, scale,and the discount of the private placement impacted by the large shareholders control, andto the interests of minority shareholders.The paper first reviews the study of the private placement, based on the principal-agent theory andinformation asymmetry theory analyzed the large shareholders control impacts on the behavior of theprivate placement. Then by2006-2011directed issuance of successful listed companies as research samples,using regression models examined the first largest shareholding ratio, equity checks and balances, thenature of the largest shareholder to decision, scale and discount of the private placement.Finally, studythe impact to the interests of minority shareholders by the private placement.The study found that:(1) the decision of private placement, the largest shareholder ratio and thedecision-making have a significant positive correlation, and the state-owned listed companies preferprivate placement. The equity of checks and balances did not play for the stake of the largest shareholderand the relationship of the private placement decisions inhibition, showed a significant positive correlation.(2) the size of private placement, the largest shareholder ratio and the size of private placement have asignificant positive correlation. And inferred that the private placement larger, large shareholders have themore opportunity to transfer of wealth. the majority of shareholders to support small-scale issuance.(3) thediscount of private placement, the shareholder ratio and the discount of private placement have a significantpositive correlation.the nature of largest shareholder and the discount of private placement have anegatively correlated, but not significant.(4) the small shareholder interests, the size of private placementand the small shareholder interests have a significant positive correlation, the discount can not representsmall shareholders against.For investors, the conclusions of this study is a correct understanding of the private placement, helpsSFC reasonable development of the principle of the private placement, to prevent the occurrence of avariety of acts against the interests of minority shareholders, to ensure the objectivity and validity of theprivate placement. The conclusions of this study has important theoretical and practical significance. To theformulation of policies for different equity structure of listed companies, equity financing of minorityshareholders on corporate investment decisions, as well as the optimization of the equity structure of listedcompanies.