Research On The Transport Interest Issue In The Private Placement For The Larger Shareholders

After the non-tradable share reform,private placement as a way of equity refinancing is recognized by the majority of listed companies with its low threshold,low cost of issue, simple operation process and other advantages. And it is gradually become market equity capital to refinance “leader”. As Chinese stock market return temperature, this trend is showing the irresistible circumstance. However, due to the high degree of information asymmetry characteristic of Chinese capital market, the major shareholders have absolute advantages of control in the management of the company, that caused the criticized breed’s problem that the major shareholders transported suspects for their interests by the way of private placement. In the view of this phenomenon, the domestic scholars have launched the related research from different angles. The research shows that Chinese listing Corporation exist the phenomenon that the large shareholders transport phenomena in the process of private placement. There is no doubt that this would be a departure from the original intention of the Commission launched the policy of private placement, reduce the efficiency of resource allocation of capital market of our country, hinder the development of China’s stock market. This paper also focus on the big shareholders transferring the phenomenon, with the period 2006 to 2013 in Chinese A-share market implementation of the private placement of listed companies. The paper research the cash dividend payments by the listed company after the big shareholders participating in the private equity placement and the way to buy the share by the big shareholders. It first research if it has some influence in the thing that the listed company distribute cash dividends after the private placement through the difference in difference method, that the big shareholders participating the private placement and they buy the share through the cash. And then the paper studies the investors buy and hold return,through the event study method after major shareholders participating the private placement in cash and asset in one year window. Finally, according to the results, the paper put forward some relevant suggestions and countermeasures to the authorities.