Research On Private Placement Of Listed Companies And The Major Shareholders Tunneling

Since 2006,the private placement has officially become the way of refinancing of listed companies in China.Because of its looser issuance policy,it has become the main way of equity refinancing.Although the system of private placement in China has been revised in recent years,the revision process is so long that there are still some shortcomings that listed companies can take advantage of.Because of the relatively concentrated shareholding structure of listed companies in China,the major shareholders can participate in the operation management and important decisions.In addition,the information asymmetry between the major shareholders and other investors is serious.Therefore,it is possible for the maior shareholders tunneling in the private placement,which has very negative impacts on the standardized development of private placement in China,the long-term development of listed companies and the protection of the interests of small and medium-sized shareholders.Therefore,it is necessary to research the problem of the major shareholders tunneling in China's private placement.This article is divided into six chapters.The first chapter briefly introduces the research background and significance,research framework,research methods and research contributions.The second chapter lays the foundation for the later analysis by summarizing the literatures related to private placements in recent years and making literature review from three aspects.The third chapter defines the related concepts and introduces the relevant theories at fitst,then analyzes the causes of the major shareholders tunneling in the private placement of listed companies in China and the specific methods of manipulation by standardizing the institutional normative process of China's private placement system and the development of private placement of listed companies from 2007 to 2017.The fourth chapter briefly introduces KEDA Group Co.,Ltd,the reasons for selection,the plans and processes of two private placements.The fifth chapter not only shows the way and process of the major shareholders tunneling of KEDA Group Co.,Ltd,but also analyzes the reasons for the failure of the second private placement and the short-term and longterm economic effects brought by two private placements.The sixth chapter not only summarizes the article and puts forward suggestions from five aspects,but also summarizes the shortcomings of the article and the prospects of the future.This paper summarizes and analyzes the reasons of major shareholders tunneling in China's private placements,which are the high participation of major shareholders,the lack of protection for small and medium shareholders,the high degree of information asymmetry,the incomplete of pricing and sales restrictions of private placements,involving a high proportion of assets,lack of a sound asset assessment mechanism,etc.The specific ways of major shareholders tunneling in private placements mainly include manipulating the issue price,virtually increasing asset valuation value and cashing out in a variety of ways.The CSRC can effectively prevent the major shareholders tunneling in private placement through regulatory and information disclosure requirements.By using the event research method,the effect of short-term announcement of private placement is not always a positive announcement effect,when there is obvious suspicion of major shareholders tunneling,it will have a more obvious negative effect.Through analysing the financial indicators related to solvency,profitability,operational and development capability of KEDA Group Co.,Ltd,it is found that the private placement has no beneficial effect on the long-term business performance.According to the previous research conclusions,there are five aspects about how to regulate the development of China's private placement and preventing the major shareholders tunneling.