The Tunneling Of Complete Listing By Private Equity Placements Of Guangzhou Pharmaceutical Holdings Limited

Complete Listing by Private Equity Placements from the perspective of operational level means a kind of capital operation in China. Which implies the tunneling behavior of large shareholdersThis paper selects the case of private placement of Guangzhou Pharmaceutical Holdings Limited as the research object. To comprehensively analyze whether shareholders transfer the interest in the whole process of directional add-issuance, and to explore its causes and corresponding policy recommendations. Concerning the particularity of the case, listed as a whole involves three Stock Exchanges, and placement process involves stock exchange merger, Current research barely mentioned this. Based on A+H shares, This paper analyzes the relationship between share price setting and tunneling behavior.Through the research on the case of Guangzhou Pharmaceutical Holdings Limited, we have the main conclusion:the Guangzhou Pharmaceutical Group is supervised by both the Mainland and HongKong Stock Market. To a certain extent, it reduces the use of cash bonuses for tunneling phenomenon but interests transfer still exists in the manipulation of pricing benchmark day timing, unreasonable Setting of share exchange price, unfair assessment of assets value, unsystematic information disclosure, as well as insider trading and so on.To conclude,regulators should enhance directional regulation of price manipulation to further standardize the method of setting the share exchange ratio, and the determination of insider trading and market manipulation. Regulators should also perfect the governance system and information disclosure of listed companies to minimize large controlling shareholders’ tunneling behaviors.