Research On The Interest Transmission Of Major Shareholder In The Process Of NS Company’s Private Placement

With the reform of non-tradable shares,China securities regulatory commission issued the administrative measures on securities issuance of listed companies in 2006,the refinancing of private placement has been standardized and formalized in China’s capital market.Since the private placement has the characteristics of simple audit procedure and low issuing cost,it has developed rapidly in China’s capital market since the policy was introduced,and has gradually become a market value management method used by listed companies and their major shareholders to conduct capital operation.Nevertheless,in the process of the prosperity of this financing method,private placement is no longer a simple refinancing method.Some listed companies and their major shareholders use private placement to manipulate the stock price,strengthen the control over the listed companies and ultimately empty the listed companies at the expense of the interests of small and medium investors.The private placement has become an important means of transferring benefits to some stakeholders of listed companies.This paper selects NS Company as a case study to analyze the benefit transfer behavior of major shareholders in the process of its private placement.This paper firstly introduces the research achievements of many scholars in the field of private placement in combination with the research status at home and abroad,then makes a theoretical analysis on the benefit transmission of the shareholders during the private placement.Case analysis is the focus of this paper,firstly,the basic situation of NS Company is briefly introduced.Secondly,the background,process and motivation of the private placement are introduced.Then,the paper analyzes the way of transferring interests of the majority shareholders in the private placement,and finally analyzes the economic consequences of transferring interests in the private placement by using the event study and the financial indicators methodology.After analysis,the following conclusions are drawn:NS Company has the behavior of interest transmission of major shareholders in the process of private placement.Although the announcement of the private placement plan can produce positive stock price effect and improve the company’s short-term market performance in the short term,the private placement has not substantially improved the overall financial performance of the company in the long run.Finally,on the basis of summing up the case,four suggestions are put forward:the first is to improve the pricing mechanism of private placement,the second is to improve the management system of the private placement intermediaries,the third is to strengthen the supervision of private placement issues,and the fourth is to improve the investment professional level of small and medium investors.