Research On The Protection Of The Interests Of Small And Medium Shareholders Based On The Implementation Risks Of Performance Commitments

In recent years,with the rapid development of my country’s market economy and the continuous deepening of supply-side structural reforms,M&A transactions have become increasingly active.Then,what risks may be caused by the performance promise in the implementation process.Therefore,based on the characteristics of the performance commitment implementation process at different stages,this article constructs an analysis framework for the performance commitment.Taking Oriental Precision’s acquisition of Pride as an example,it examines the impact of potential risks of performance commitments.The study concluded that the performance commitment signing stage presents the "three high characteristics" of "high commitment,high valuation,and high premium".At this stage,the valuation system is disordered,the performance target is set improperly,and the pre-regulation risks may lead to small and medium-sized enterprises.The immediate interests of shareholders are impaired;during the commitment period,the characteristics of "low rate of compliance" and "accurate fulfillment of promises" appear,control rights are unknown,major shareholders use related party transactions,equity pledges,financial fraud and other means to embezzle interests,and legal provisions are absent.Risks may cause the interests of small and medium shareholders to be infringed;after the commitment period,there is a tendency to "change performance",large amounts of goodwill impairment,and litigation disputes.this article proposes to improve asset evaluation methods,set reasonable performance targets,clarify ownership of control rights,strengthen information disclosure mechanisms,improve relevant laws and regulations,and strengthen internal and external supervision to protect the interests of small and medium shareholders.