Research On The Impact Of Performance Promises On The Interests Of Small And Medium Shareholders In Yabaite’s M&A And Reorganization

Under the background of accelerated economic transformation and increasingly fierce market competition in China,performance commitment compensation agreement has always been the core element in M&A and reorganization transactions.The original intention of the performance commitment agreement is to serve as the valuation adjustment mechanism in the M&A transaction,reduce the operational risk and financial risk in the M&A and restructuring,and protect the interests of investors.However,in the practice of merger and acquisition,the performance commitment that should be used to protect the interests of minority shareholders in the transaction of merger and reorganization may become a FIG leaf for large shareholders to plunder the interests of minority shareholders.This paper takes Yabaite(002323),a company with "high valuation,high premium and high commitment",as an example,and adopts the case study method to study the conflict of interests between major shareholders and minority shareholders in Yabaite ’s merger and reorganization transaction.The results show that: firstly,the controlling shareholders of Yabaite have great motivation to manipulate the transaction price by means of high valuation premium to obtain huge profits and transfer the risks to the minority shareholders;Secondly,the amount of the performance commitment agreement is huge,which may lead to the performance fraud of the commitment party.Finally,after the expiration of the restricted sale period,Yabaite’s large shareholders started to reduce their stock holdings for cash,constantly transferring the company’s assets and infringing the interests of small and medium-sized shareholders.This research put forward the following Suggestions: first,for the company’s internal governance,should further deepen the directors of the listed companies,major shareholders the right to senior positions such as checks and balances,reduce conspired to leap into the possibility of fraud,strengthen the role of the independent director system,a dominant share structure of listed company,determine the need to have some special arrangement to protect the interests of small and medium-sized investors;Secondly,for external supervision,at the beginning of the deal to curb high trading at a premium,to strengthen the supervision of a third party appraisal institution,strictly verify the qualifications of a third party appraisal institution,stepping up efforts in supervising the commitment to the performance period,try to identify prevent trading exists in the information leaked in advance,to the whole process supervision,mergers and acquisitions to reduce the possibility of artificial colluded,Enhancing the reliability of M&A transactions and increasing vigilance after the renewal of performance commitments;Finally,for the small and medium-sized shareholders,we should rationally view the signing of the performance commitment agreement attached to the restructuring.We should be more alert to the situation that the agreed amount of commitment is far higher than the existing profitability,so as to reduce the possibility of being infringed by the major shareholders.The introduction of the class action mechanism of the small and medium-sized shareholders and the public is an important means to protect the small and medium-sized shareholders.Let small and medium investors have convenient rights protection channels and a sense of compensation.By means of case study,this study theoretically enriches the research and practice of corporate governance in performance commitment.In the theoretical sense,from the perspective of the interests of minority shareholders,it focuses on the performance commitment attached to reverse merger and reorganization transactions,which enriches the theoretical research perspective of performance commitment.In the practical sense,it can provide reference for the improvement of the performance commitment system by Chinese regulatory authorities,improve the identification ability of small and medium-sized investors on the performance commitment related issues,and reduce the possibility of being infringed.