Research On Earnings Management And Information Disclosure Before Reduction Of Shareholdings In Listed Camponies

After the completion of the equity division reform,the stock market of China has undergone great changes.After the lock-up period expires,the controlling shareholders can freely circulate stocks in the secondary market.Shareholders have a new type of profit-making method,reducing stock,along with the listing and circulation of the stocks.Therefore,the stock price has become the most direct factor affecting the wealth of the major shareholders,and therefore affects the behavior of major shareholders.Under this background,the shareholder's shareholding reduction of the listed company frequently occurs because it is related to vital interests.Many problems have arisen in the process of its shareholding reduction,and there have even been reductions in shareholdings and private placements phenomenon.The existing literature on shareholding reduction pays more attention to the incentives and economic consequences of shareholding reductions by controlling shareholders of listed companies.There are very few studies on the behavior of shareholdings before the reduction of shareholdings.This paper selects companies that have been investigated by the Securities Regulatory Commission as research objects.Evidence shows that the controlling shareholder of this case has collaborated with others to conduct a private placement,and after the lock-up period has expired after the subscription of all the private placement shares has expired,the profit is reduced.In addition,it was found that its stock price deviated sharply from the Shanghai Composite Index before the release of restricted shares until the lifting of sales of restricted shares,and cross-border mergers and acquisitions and good news were released before reduction.Another literature study shows that listed companies often have positive balances before reducing their holdings.So this article will find and summarize problems of the controlling shareholder in the reduction process from the perspective of earnings management,cross-border mergers and acquisitions and information disclosure.So that to regulate the behavior of major shareholders to reduce their holdings to make recommendations,and provide investors with investment decision-making reference.The case analysis of this paper is divided into four parts.First,the Jones model and the comparative analysis method are used to identify the earnings management behavior of Xinke Materials,and it is found that the company has surplus earnings management activities and real activity earnings management of accrued items in the year of reduction.Afterwards,through the comparison of financial figures,the specific path of earnings management was studied.It was found that Xinke Materials increased the likelihood of non-recurring gains and losses,use of non-recurring gains and losses,related party purchases and sales of goods,reduction of bad debts,and depreciation provisions in the year of reduction.Then,after studying the information disclosure behavior of the case company before the shareholding reduction,it found that the frequency of disclosure of good information before the reduction of the company's shares was significantly higher than that of companies in the same industry,and there was a phenomenon of delay in the disclosure of bad news,which was disclosed on the eve of its reduction.The “high-to-send transfer” program conducted a study and found that it was a convert-to-share program that was issued in the case of poor transfer-to-equity conversion,and therefore its motivation was likely to be to help reduce its holdings.Finally,a comparative analysis of profitability and growth capacity before and after the reduction of the holdings found that the business condition before the reduction was significantly improved,but after the reduction was completed,it fell back to the previous state,indicating that the major shareholders of the case company are reducing their holdings.Predecessors have improved the company's performance,but this short-term performance improvement cannot be maintained in the long term.By studying the behavior before the reduction,we believe that in order to regulate the order of reduction in the secondary market,in addition to regulating the reduction system,we should strengthen corporate governance and improve the information disclosure system related to mergers and acquisitions and related transactions.Restrictions on cross-border mergers and acquisitions,restrictions on the transfer of goods and other aspects of strengthening supervision.