Research On The Relationship Between Major Shareholders' Participation In The Private Placement And The Growth Of The Listed Companies In China

Since the implementation of the private placement system since 2006 in China,because the private placement has lower information disclosure requirements,more simple audit process,lower financing restriction when listed companies make refinancing decisions,private placement has become the first choice.What's more,its financing scale has been increasing.In 2016 alone,the total amount raised by private placement was as high as 171 million RMB,more than ten times the total amount raised by IPO in the same year.The financing situation can be seen.However,in the rapid development of the scale of private placement at the same time,some problems can not be ignored also exposed,and the market has attracted investors and academia widely criticized,especially the issuing price is not reasonable,the issuance price to determine the base date and the date of implementation between the larger discount,there is no risk of arbitrage space,in addition,excessive financing problems and exposed in the process of the private placement of listed companies through private placement to the interests of investors in the transfer of benefits,the private placement to some shareholders of listed companies,investors also caused great dissatisfaction.Therefore,in February 17,2017 the Commission issued " Amending the detailed rules for the implementation of non-public offering of shares of listed companies in China" to standardize the financing behavior of listed companies.There is a discount in the pricing of private placement in Chinese listed companies.The issue price should not be less than average price of twenty days before the benchmark day.Before new refinancing regulations promulgated,the pricing benchmark can be chose among the board of directors decision announcement day,the shareholders decision announcement day and the first day of issue duration.But when investors purchase,there will be some discount compared with the pricing basis.Therefore,the implementation of the subscription price and the market price are in two kinds of situations: one is discount subscription,the majority situation.Most of Listed Companies issuance price will be lower than the market price of the implementation date.In this case,the large shareholders may not only enjoy the capital gains,if the company grows better they can also share the benefits of growth;Another situation is a special phenomenon in the market,we call it premium subscription.In this situation,the price is higher than the market price of the implementation date,especially large shareholders will face the three-years ban,there is a great deal of uncertainty in the existence of capital gains at the time of the prohibition.Moreover,from the point of view of the actual situation in recent years,the possibility of profit is very small.What's more,premium subscription will increase shareholders' input.So what is the motive of the subscription? From the signal transmission theory,when the large shareholders participate in the company's refinancing,they will convey their confidence in the company's future prospects and to some extent this will help the company refinancing success.However,the signal transmission after all is not the true facts,also it can not guarantee the company's growth real good in the future,such as large shareholders participate in the subscription only to convey a positive signal in order to ensure the financing.Therefore,this article will focus on the relationship between the large shareholders' participation in the subscription and the growth of the company based on the above two kinds of circumstances,with a view to the real motivation of large shareholders' participation in the private placement.We hope to provide a useful reference for the decision-making of investors and the supervision of government departments.This paper studies from the overall,including samples of large shareholders participate in the free and full level,and then samples with the large shareholders participation further divided into large shareholder discount and premium subscription,we use Probit regression analysis to research the reason of the major shareholders subscription;Finally,to research the reason for large shareholders' premium subscription phenomenon,we use multiple regression analysis to find out the reason why large shareholders participate in a premium subscription.In the course of the study,this paper uses the research method of combination of theory and empirical research.In theory,we use the placement theory combined with the company growth theory and elaborate the mechanisms and ways of study in detail.In the empirical analysis,we based on the collection,collation and deletion of data,using the 2012-2014 data of listed companies as research samples,established two yuan selection model and multiple regression model to test the hypothesis of the empirical research.The paper gets the following conclusions:(1)the growth of listed companies does not have a significant positive impact on whether or not the large shareholders participate the he subscription of the private placement.Shareholders' participation is not based on the company's future growth,and they just to prove their confidence in the company as well as to send a positive signal to other investors;(2)through further study,we found that the company growth have no significant correlation with the large shareholder discount and premium subscription,indicating whether the purpose of major shareholders' subscription for the private placement of new shares is to show confidence in the listed companies,or in order to reap the benefits of control,large shareholders' participation is not based on long-term performance of Listed Companies;(3)even if the major shareholders will be faced with a higher risk when they participate in a premium subscription,they still participate in the subscription actively,we consider that there are three possible explanations: the first is to give up short-term income and focus on long-term interests in the company growth;the second is to ensure the issuance of the company's success,in order to send a signal of the future confidence and just a little token of subscription;the third is through private placement transfer of benefits they will obtain control benefits.Therefore,aiming at the problem in the process of the private placement of Listed Companies,this paper argues that the use of funds should have a clear intention,and should be refrained from excessive financing.Moreover,we suggest that the government departments should strengthen the issue threshold and focus on the supervision in the performance of the company after the implementation of private placement.