A Case Study Of Alienation Of Internal Capital Market Function Fosun

How to manage capital effectively,the essential differences exist in the management model between internal capital market(ICM)and external capital market,which respectively depend on the "executive order" and "contract" to manage the capital flow among departments and enterprises.Compared with ICM,the advantages,such as comprehensive information,financing facilitations and motivation’s effects are not possessed by the external capital market.ICM has a significant effect on improving the allocation of funds and capital.However,ICM,which seems to be a "double-edged sword",supplements and replaces the inefficient financing of the external market while the defects of company management and the lag development of ICM result in function alienation.At present,the objective facts that marketization level is low and the external capital market is inefficient are in China,it is feasible for enterprises to apply for the means of internal capital market to ease financing control.But the reasons,such as the existing and ICM system is imperfect,pyramidal holding structure is common,government supervision vacancy,easily arouse controlling shareholders’ opportunism and lead ICM to optimize allocation of resources,ease function alienation of financing bundles,reduce the market value of enterprises and hinder the healthy development of the capital market.It is an urgent problem for China’s capital market to weak the negative influence caused by the dissimilation of ICM function in enterprise group and promote its ought-to-be function.This paper adopts the case study,which the point is Fosun department’s Shanghai YuYuan Tourist Martco,NanJing Iron & Steel,FoSun Pharma three listed companies,with associating the method of theory research,financial index analysis and chart analysis.This paper also compares the financial data and model of listed companies to make sure that whether the internal capital market in FuSon exists in ICM’s function alienation,and affirm ICM’s function alienation of FuSon’s internal capital market.Then,based on annual reports of listed companies in FuSon and database of CSMAR Solution,this paper study the manifestations and economics consequences of ICM’s function alienation in terms of equity exchanges,occupation of funds and mutual guarantee.This paper further analyzes the reasons of ICM’s function alienation from the micro(enterprise factors),meso(industry characteristics and cycles)and macro(institutional supervision).A research perspective in this paper differs from other cases studying ICM’s function alienation,this paper will put ICM’s function alienation in the entire galaxy internal capital market to compare,including three listed companies.And this paper also tries to analyze underlying causes of the family controller tunneling or supporting the listed companies.Essentially,ICM’s function alienation of private enterprises is just like a game between overall interests of entrepreneurs or family marketing enterprises and local benefits of marketing enterprises and minority shareholders.The family controller just tunnel and support marketing enterprises after weighing different interests,and damage the interests of marketing enterprises and minority shareholders with satisfying the general strategy or private interests of entrepreneurs.Therefore,we give some pertinent suggestions,which is a reference for private enterprises healthydevelopment and standard ICM operation.