Research Of Tunneling In Private Placemen

Administrative Measures for the Issuance of Securities by Listed Companies, which was put in force in May 8, 2006, had made some more specific provisions of private placement. Because of its own unique advantages, the private placement has valued by many listed companies and is coming into people’s sight. Before this, listed companies were dependent on public offerings and right offerings when they were financing. Compared with the other financing methods, the private placement has a lot of advantages, such as low issued threshold, low cost, simple audit process and so on. Thus, more and more listed companies tend to choose the private placement as the major refinancing method. Statistics from China Securities Journals has showed that in 2014, about 270 companies in these two cities issued Seasoned Equity Offerings and collect near 500 billion RMB. Compare to 2013, the number of financing companies was increased by 12.5% and the scale of actual collect money was increased by 43%. It has presented a rising tendency both on the company number of Seasoned Equity Offerings and on the scale of money collecting.As a new financing way, the private placement still has many imperfect places, for example, the price of Seasoned Equity Offerings is so simple that it leads to a large operating space. Due to the Information Asymmetry, the related business between the Seasoned Equity Offerings objects and companies lacks transparency. Some researchers have found that it has existed the tunneling for the big shareholders in the private placement. Usually the big shareholders will seek wealth in the private placement by making use of their own advantages and damage the interests of medium and small investors. Therefore, in investors’ mind, the private placement has become the main way for big shareholders to seek wealth.A lot of case analyses had been done to research the tunneling in the private placement. But most of them were focus on the manufacturing, energy and chemical, and other industries, the case study for the financial industrial especially for banking was rarely. So this article will mainly talk about the banking. We will put forward the hypothesis of tunneling; then we will have detail analysis about the tunneling in the private placement through the perspectives such as the timing of the Seasoned Equity Offerings, increasing price and object of the Seasoned Equity Offerings; last we will draw a conclusion and put forward some relevant policy suggestions. It will have a certain practical influence for perfecting the regulation system building of financial market and protect the medium and small investors’ interests.