Research On Conflict Of Interests Between Large And Minority Shareholders In Private Placement

Since the reform of Equity Division,the private placement is an important equity refinancing method in China's capital market,and it is favored by listed companies because of its advantages such as low management level,easy operation and low transaction costs.It has completed 823 and 794 private placements from 2015 to 2016 in Shanghai and Shenzhen stock market.The amount of private placement financing totaled 1,800.899 Billion yuan in 2016 and 1,246.612 billion yuan in 2015.The amount of financing increased by 44.46% in 2016 compared to 2015.With the growth of private placement and the lack of supervision laws,there have been some chaotic images of private placement.In the case of private placement which large shareholder take part in,major shareholders rely on their own control over listed companies,using high discount rates and high dividends after the increase,which infringes the interests of minority shareholders and undermines the securities market environment.This article uses the discount rate as an intermediate target to study the effect of the private placement which large shareholders participate for major shareholders on the conflict of interests between large and minority shareholders,and tries to find a constraint mechanism for large shareholders.It is of great significance to the healthy development of directional additional issuance in china.This paper took an approach combining theoretical and empirical analysis.Through theoretical analysis,it is found that the higher the discount rate,the greater benefits large shareholders attain,but the discount will dilute the equity of small shareholders.The higher discount rate is,the smaller interests of minority shareholders attain.Using the discount rate as an intermediate target in empirically analysis,selecting private placement events which major shareholders took part in from 2015 to 2016.Large sample of data is used to conduct a comprehensive empirical test on the influence of investor sentiment and large shareholder behavior on the private placement discount.The study finds that the higher investor's sentiment in the secondary market,the higher discount rate of the private placement.It has more significant influence in the case of large shareholders subscript in non-pure cash.In the primary market,major shareholder opportunism and subscription ratio are significantly positively related to the private placement discount,and the subscription method has no significant effect on the discount rate,but the average discount in the condition of asset purchasing is relatively high.With investor sentiment rising,large shareholder opportunism motives and high proportion of subscriptions have more significant effect on the discount rate,and the interests of minority shareholders are even more impaired.Finally,this article puts forward some suggestions on different regulatory policies for quoted companies,risk education for small shareholders and protection of minority shareholder's interests.