Conceptual Hype,Private Placement And Tunneling Of Listed Companies

Due to the late development of Chinese capital market,the relevant market supervision and management mechanism is not perfect,many small and mediumsized investors in the market lack enough investment rationality,with a strong psychology of chasing up and killing down,there is a serious agency problem between the major shareholders of listed companies and small and medium-sized investors,many listed companies in order to pursue private interests,with the concept of hyping up the stock price to harm the interests of small investors.In addition,concept speculation has the advantages of fast heating up,wide spread,difficult to be regulated,so concept speculation has existed for a long time in our capital market,and has a serious influence on the sustained and healthy development of the capital market.Private placement has become the main way of refinancing for listed companies because of its low issuing cost and low issuing conditions.However,when the object of subscription is non-related shareholders,in order to reduce equity dilution,major shareholders tend to hype up the company’s stock price with the help of some hot market concepts,emerging technologies or industries,national industrial policies,etc.,in order to raise the price of private placement,and some major shareholders tend to hollow out the listed company after private placement.This behavior not only harms the interests of minority shareholders,but also hinders the healthy development of the capital market.In recent years,market regulators have gradually increased their efforts to crack down on conceptual speculation and stock price manipulation.However,because it is difficult to obtain substantial evidence of conceptual speculation,they can only take warning supervision on conceptual speculation,which can not solve the problem of conceptual speculation in the capital market to a large extent.This paper will study how listed companies raise the issue price of private placement through concept hyping,thus aggravating the behavior of major shareholders’ tunneling.Combined with the case of Sichuang Yihui,this paper analyzes and summarizes the main characteristics,motivations and methods of concept hyping in the current capital market from the perspective of the identification of concept hyping,and then analyzes the listed companies before and after private placement.The behavior of conceptual speculation and manipulation of stock prices to achieve high private placement by taking advantage of favorable national policies,industrial development plans and information disclosure,as well as the behavior of major shareholders cashing out by reducing their holdings,occupying company funds and hollowing out listed companies through connected transactions in the whole process,finally put forward targeted governance measures and suggestions.This paper finds that:(1)Concept hype can often be identified from the basic situation of listed companies.The basic performance of Sichuang Yihui which conducts concept hype is poor,the quality of external information disclosure is low,the lack of practical actions,and the company has not brought substantial improvement;(2)In the process of private placement,Sichuang Yihui carried out conceptual speculation in order to complete the high private placement,cooperate with major shareholders to reduce their holdings and alleviate the company’s financing constraints;(3)The manifestation of conceptual speculation in the capital market is mainly "rubbing" hot spots,replacing "actual" with "planning",selective information disclosure,etc.Sichuang Yihui made use of the national industrial policy support,industry development planning instead of later practical action,good news disclosure and performance forecast concept to hype;(4)The private placement of listed companies behind the concept speculation is often accompanied by the tunneling behavior of major shareholders.The major shareholders of Sichuang Yihui take the opportunity to reduce their holdings to cash out,occupy the funds of the listed company and hollow out the company by increasing related transactions;(5)The management of concept hyping needs to be combined with internal and external,and the unified role of external supervision and internal governance can achieve the maximum regulatory effect.