Research On Asset Injection And Tunneling Of Controlling Shareholders

After the equity division reform completed,Chinese capital market began to enter the era of full circulation,but the problem of stock right focused in listed companies still exists universally,and the weak position of both little and medium shareholders remaines unchanged.In recent years,there have been frequent occurrences of tunneling in the capital market and infringement of the interests of both little and medium shareholders.This has caused a serious impact on the healthy development of the capital market.At the same time,with the rise of the new form of private placement,listed companies in China were been provided new options for convenient and flexible financing.However,their low issuance conditions and raise funds freely,especially the characteristics of asset injection,also have become new channels to carry out interests for controls Shareholders.Therefore,the study of asset injection and tunneling issues in private placement is particular important,and it is very valuable to discuss the process and its means of interest transfer.Based on those related literature about literature review of controlling shareholder theory,tunneling,and asset injection,this paper have analyzed something which includes the route damage and government of tunneling and the situation of tunneling in private placements.At the same time,through the introduction of the background and specific plans of Zhejiang Oriental in 2016.Then we analysis the problem of tunneling in the case selected through two aspects which are the specific process of tunneling resulting and asset injections in private placements and the economic consequence it leads.Finally,we discovered that in the launch of private placements of new assets,controlling shareholders locked down the lower issue price through the pricing basis and the timing,then used the poor assets of China and South Korea Life Insurance,non-quality assets of Zhejiang Gold Trust and the Earth Futures as the target asset,and artificially high valuation of these assets evaluation,so that controlling shareholders can acquire more equity to realize the tunneling.At the same time,we discover that this private placements in asset injection has resulted in different damage to both the operation situation and the profit level of listed company.In the end,this paper proposes some corresponding advice to the improvement of Chinese tunneling in the private placement.