Study On Private Benefits Of Control In China’s Listed Companies

The booming of the economic development of China capital market has played animportant role. It makes social resources were fully optimized, but as the world capitalmarkets, there are still some problems listed companies in our country. Conflicts of interestbetween large shareholders and minority shareholders have been existing in the developmentof capital market in our country. It hinders the healthy development of capital market inChina. In addition, the problem of non-tradable shares, make the problem is more serious.Bad phenomenons such as "stock with different rights" of "a dominant" are common. As forlong-term equity division problem restricting the development of Chinese capital market, theChina Securities Regulatory Commission has enacted the non-tradable share reform in2005.It makes our country capital market step into the era of full circulation. How effective is it?After the reform of shareholder structure what are the factors affect the Private Benefits ofControl? Facing the new environment, how to cope with the phenomenon of Private Benefitsof Control? Are the problems to be solved.Firstly, the problem is the measure of Private Benefits of Control. The reform ofshareholder structure affect the behaviors of the controlling shareholders: before the reform,big shareholders holding non-tradable shares of the company, not listed circulation, so the netassets per share as reference value; after the reform, the large shareholders of non-tradableshares can be listed circulation, the reference value shall be the stock yield. Based on thedifferent reference value before and after the reform, this article provides the measurement srespectively. It can evaluate the effectiveness of reform of shareholder structure in terms ofPrivate Benefits of Control. The second question is the influence factors of Private Benefitsof Control. By combining normative analyses and empirical analysis, analyzing and testingthe influence factors of the Private Benefits of Control from two aspects of theory andexperience. Then, using event study method, emphatically analyzed the effects after thereform between the controlling shareholders self-interest behavior and the key factors ofPBC.The study found that after the reform, the degree of Private Benefits of Control hassignificantly reduced. After the reform, big shareholders equity linked to the market value of listed companies, prompting them to make decisions is conducive to the interests of all theshareholders. When company stock yields high, the extent of the Private Benefits of Controlis low, when company stock yields low, the extent of the Private Benefits of Control isincrease. We also found that before the big shareholders in the case of PBC transfer, there isthe phenomenon of increase share prices. This is a new issue of reform of shareholderstructure.Finally, on the basis of the study, in view of the new problems after the reform ofshareholder structure, we put forward some suggestions of controlling the Private Benefits ofControl.