Research On Financial Governance Problems Of Our Private Equity Funds Corporations

Private equity fund is designed for private enterprises to invest, and provides value-added services to the invested enterprise. After realizing the increasing of the value, it will exit by listing or selling equity in a safe way, finally realizes the profits of capital. It has the features such as strong higher-yielding, information asymmetry, strongly professional,flexible operation, high information security. It is different with public funds and illegal fund-raising in essential. At the same time, private equity funds has the indelible role in promoting employmen、economic and technological, especially along with the market environment, the reform of relevant policies and regulations, our private equity funds have been legalized. Under the support of our government, it develops rapidly and presents the new characteristics in securities market. But we must aware that our private equity fund is not mature enough, there is a certain gap by comparing with foreign funds. Not only the internal governance issues are not solved,but also the external market regulation is not enough.Because of the two aspects of internal and external, our private-equity firms appear all sorts of problems, and most of these questions are embodied in the financial governance issues. Financial governance is a process of perfecting the structure of corporate governance, coordinate financial relationship of each stakeholder in internal and external, the distribution is the center, which can reach a balance of stakeholder’s.the core of corporate governance, it optimizes the allocation of resources and financial decisions. Under the condition of modern market economy,in order to ensure the financial decision-making efficiency and sustainable development of the company, we must make the distribution as the center and solve financial management problems, which mainly displays in: financial rights relations are not clear, lack of the external supervision, financial constraints and salary incentive mechanism is imperfect, lack of risk management and internal control, etc. These problems have led to the chaos in the company’s financial governance.Aftering studying the theory of the private equity funds and related financial management, the paper makes the distribution as the leading factor, uses the case method, and lists the two typical different financial management problems. One is the infighting of shareholders in Chuang shi xiang company, the other is the Hai fu investment and related parties signed the agreement on bet. The above two cases reflect different loopholes of financial governance. This paper analyzes the financial problems by theory of financial governance, and combines with the case itself from multiple aspects by analyzing the exposed problems, and give corresponding Suggestions. The purpose is to explore how the private equity firms use a certain financial governance means, through the rational allocation of financial,coordinate rights, responsibilities and benefits among stakeholders, solving conflicts of interests between eachother. At the same time, the research also helps to deepen the financial governance theory of private equity fund. After analyzing cases, the paper summarises the difficulties of our private equity market, and learns from foreign private equity’s development. Finally it puts forward a financial governance mechanism suitable for national conditions, which promotes long-term cooperation in interested parties and ensure the enterprise decision-making. Researching this paper helps to perfect our private equity fund financial management and guide the practice better.