Whole Listing By Private Placements And Related Party Transactions

Before the reform of non-tradable shares, many listing companies in China are spin-off listings. But this also leave great hidden trouble for the standardized operation of listing corporations, such as competition in the same business, improper related party transactions, industry chains separated, et al., which will become big barriers to improve and perfect the governance structure of the listing corporations.Therefore, the Commission, the SASAC and other relevant departments began to formulate relevant policies to explore ways to whole listing of large state-owned enterprises in 2003. In the conference on national asset supervision held by SASAC in 2013, the work to speed up the whole listing of large state-owned enterprises was emphasized, we should increase the adjustment and regrouping and improve the economic vitality, driving the healthy development of small and medium-sized enterprises. Optimizing the industrial structure and promoting the resource integration by whole listing is widely welcomed by the government and enterprises.Whole listing has become the trend, and its superiority has also been widely recognized by the theory and practice sessions. But so far the related research of whole listing is still rare. Based on this, in order to investigate the long-term efficiency of whole listing, this paper uses the samples of listed companies which finish reverse takeover and thus list main business units of groups as a whole through private placement over 2006 to 2013.We examine whether the whole listing have an impact on related party transactions(RPTs) of listed companies. We find that the larger scale of the non-market pricing RPTs, the lower enterprise value of the listed companies; After whole listing, the RPTs based on the market pricing principle do not drop significantly, while those based on non-market pricing principle decrease significantly; Furthermore, the higher the level of whole listing, the more decline of the non-market pricing RPTs, which proves that the whole listing by reverse takeover do improve companies’ long-term efficiency.