Research Of Tunneling In Overall Listing Of State-owned Enterprise

The overall listing of China's capital market is a unique concept.In the early stages of China stock market,as the limited liquidity of market and the different profitability between different subsidiaries,many companies only choose some more profitable assets to spin-off listing.Although the spin-off listing help enterprises a lots in financing and also provide some quality stock for capital market,led to the related transaction and other issues.In recent years,with the support of the policy,more and more state-owned enterprises began to choose the overall listing to solve those historical problems.However,due to the overall listing process involved in the private placement which will result in many related transactions.In the process of overall listing,due to the management of state-own enterprises can grasp more information than invertors,more risk of interest conflicts will occurs.This paper takes the overall listing of Power Construction Corporation of China as an example,analyses the motivation?timing? related transaction after overall listing?profitability?stock price and other of overall listing.The result show that: 1.The management choice for overall listing is not out of the interest of the investors,but in order to complete his own feedback on performance.2.Utilized the overall listing to get excess performance reward.3.Transferring benefit by transfer pricing.4.Transferring benefit through increase the rate of dividend.The further research found that that although most private placement has brought positive returns for investors,but there is no denying that the tunneling still exists in the process of overall listing.The reason is that: 1.The amount of the associated transactions after overall listing has not been effectively controlled.2.The abuse of the word of overall listing by the media.3.Management word in related non-listed companies and make tunneling become easier.4.Regulation is not strict enough.