Super Raised Funds, Corporate Governance And Mergers Acquisitions And

On October30,2009, the first batch of28companies was officially listed on GEM in Shenzhen. The GEM (Growth Enterprise Market) becomes perfect gradually and makes gratifying achievements after the five-year development. However, the high issue price, high earnings and investors’ high expectation, which lead to the super raised funds on GEM more serious, have caused widespread concern. Faced with the sudden "big pie" from the sky, the companies on GEM may be difficult to find good investments, while we find another abnormal phenomenon can provide an opportunity to research this problem. Mergers and Acquisitions on GEM occurs frequently after IPO financing, which is higher than twice as much as the motherboard market. However, whether M&A can seek a way to solve the super raised funds and creat value for enterprises is also worth research. So we believe it is necessary to seek the answer according to the specific circumstances of the listed companies on GEM.The paper argues that a number of the super raised funds on GEM are hand in hand with M&A, therefore, the main objects of this paper include whether the super raised funds only through M&A to seek a way out can be used effectively to achieve the optimal allocation of resources, thus improve the performance of M&A. This paper selected355companies from GEM from2009to2013for study, summarized the relevant literature, and analyzed the specific use of the super raised and did empirical research to examine the possibility of M&A and its performance by using the super raised, according to the theory of principal-agent theory, the theory of free cash flow and the theory of over-investment. On this above basis, using the theory of corporate governance and the theory of incomplete contract as a guide, this paper further built model about the relationship among the super raised funds, the performance of M&A and corporate governance to examine the impact of corporate governance on the performance of M&A.The results show that the companies on GEM tend to make M&A by using the super raised funds. The more the super raised funds is, the greater the possibility of M&A, as well as the worse the performance. After add the indicator of corporate governance to the model, we find the salary of executives can positively improve the relationship between the super raised funds and the performance of M&A; That the actual controller is a single natural person or are family members makes the relationship between the super raised funds and the performance of M&A worse; The proportion of independent directors come opposite to the assumption, that is to say. it worsens the relationship. The role of the equity balance and one who is the chairman and general manager is unobvious in this paper. Hence, this article put forward to the appropriate suggestions from the regulatory authorities, the GEM listed companies themselves and investors, in order to effectively regulate the super raised funds and improve the their efficiency, thus ensuring a sustained and steady development of the listed companies on GEM.