Exploring Pricing Issues Arising From Equity Transfer Of "Three Types Of Shareholders" In Companies To Be Listed In The New OTC Market

In recent years,the new OTC market has been developing rather rapidly.Up to May 5,2017,there were approximately 11,116 listed companies with a total of 634.068 billion shares.More and more companies successfully obtained financing after joining the new OTC market,and the capital scale,production capacity and profitability of these companies have made a qualitative leap.As a result,they gradually extend their strategic goals and have an increasingly larger demand for financing.However,the new OTC market is unable to satisfy their demand so that more and more companies resort to IPO.Since 2015,the three types of capitals,asset management plan,contractual fund and trust plan were permitted to enter the new OTC market,thus stimulating the "assets management fever".The emergence of "three types of shareholders" among a large number of outstanding corporate shareholders should have been beneficial for companies to attract capital investment.However,these companies encounter obstacles when they want to withdraw listing and list on another board.The fundamental reason for this is that the issuance examination committee does not recognize the status of the "three types of shareholders" for fearing that it's likely for them to hold shares on behalf of others,transfer benefits and launder money illegally.In addition,it's hard to guarantee the normalization of investments for "three types of shareholders";and due to the problem of large fluidity,the ownership structure of the company is likely to be unstable.Therefore,if a company plans to file for IPO,it needs to disclose the identity of corresponding shareholders or clean out the "three types of shareholders".When a company wants to add in "three types of shareholders"during non-public issurance of stocks,it has to check in with the China Securities Regulatory Commission.Therefore,it is easy for the "three types of shareholders" to restore the shares,and they are hence willing to cooperate with the company.However,if the company has to circulate the newly-added shares of "three types of shareholders" in a secondary market,it's hard to guarantee the company's normalization and normality so the "three types of shareholders" are comparatively unwillingly to cooperate.Therefore,it's increasingly hard for pre-IPO companies to disclose the identity of corresponding shareholders.This thesis aims to study equity transferpricing from the perspective of cleaning out the "three types of shareholders".The first chapter expounds on the research background,purpose and significance of the study on "three types of shareholders",comprehensive review,the framework of the paper and its research methods.The second chapter elaborates the related theory of equity transfer pricing.The third chapter introduces in details the definition of "three types of shareholders",their current situation and the source of their motivation of entering new OTC market.It also gives some information on company H and the "three types of shareholders" in the current equity structure of the company.In the fourth chapter,cost method,market approach,and income method are jointly applied to evaluate company H's equity value;performance indemnification clauses with multiple options are put forward.Then the fifth chapter evaluates equity transfer pricing strategy from the perspective of compliance with legal requirements,taking into account the impact on substantial shareholder and the company.The sixth chapter summarizes the conclusions drawn in the paper,points out its limitations as well as relevant suggestions.The subject of "three types of shareholders" studied in this paper has newly emerged in the capital market only since two years ago.There have been no other relevant theoretical and empirical research committed to this area before,so this thesis has its uniqueness.It tentatively proposes two different types of performance compensation clauses,conservative and risky,which provide more choices for withdrawing shareholders and mitigate substantial shareholder's risks.The equity transfer pricing strategy put forward in this thesis is highly innovative and it's hopeful that it would provide reference for other researchers and for practical operations.