| Underwriting in China’s capital market began in 2015 during the sharp adjustment of the stock market.According to the research,underwritten shareholding can play the role of enhancing share prices,motivating employees and improving the internal governance of companies.Combined with the practice of underwriting shareholding increase in China’s listed companies,in-depth study of the problems in the specific application of underwriting shareholding increase has important theoretical and practical significance to play the proper role of this tool.The effect and problems of the two underwritten shareholding increases implemented by Unilumin Group is a good sample for research among listed companies.It is found that the motivation of the company’s implementation of underwriting shareholding increase mainly includes the following four aspects:(1)expanding the scope of incentives,establishing and improving the benefit sharing mechanism between labor and owners,deepening the company’s incentive system,realizing the consistency of interests among the company,shareholders and employees,and activating the vitality of labor factors.(2)The capital market is facing an irrational decline and the company’s share price is continuously undervalued.Based on the judgment of the industry boom and the expectation of the company’s future performance,the actual controller encourages all employees to buy the company’s shares to send positive signals to the market and thus boost the share price.(3)Attract investment and promote the smooth progress of financing plans such as convertible bonds and targeted issuance.(4)Mitigating the risks associated with equity pledges and avoiding the risk of closing out the pledged shares due to impairment in value.The analysis concludes that,firstly,underwritten shareholding increases can indeed bring significant positive effects on company share prices in the short term,but cannot effectively prevent share price declines in the long term.Second,the motivation to participate in the underwritten shareholding increase is not high,and the incentive effect does not meet expectations.Third,it failed to reduce agency costs and did not produce significant improvements in corporate governance structure and financial performance.The reasons for this are mainly the following three points: First,the lack of actual performance and profitability support for the underwritten shareholding,the company’s long-term stock price growth is weak.In addition,employees,as insiders,understand the actual development of the company and lack confidence in increasing their holdings.Secondly,the underwritten shareholding increase and employee stock ownership plan are not properly connected,and employees consider and raise funds for a short period of time,which affects the participation.Third,the actual controller’s equity pledge ratio is high,and employees have doubts about the actual controller’s ability to perform.Based on the above findings,in order to let the underwritten shareholding increase play its proper effect,regulate the underwritten shareholding increase of listed companies and avoid its abuse and reduction to the means of listed companies’ speculation,this paper suggests: first,enhance employees’ confidence.Add the commitment of controlling shareholders not to reduce their holdings during the duration,extend the validity period of buy-in to give employees sufficient time to consider and raise funds,appropriately shorten the duration to reduce the length of capital occupation,implement the performance guarantee measures of deposit,and set up a supervisory committee of underwriting shareholding increase within the company.Second,improve the information disclosure and supervision system.Standardize the announcement of underwriting increase,refine the disclosure requirements of risk indication,increase the upper limit of equity pledge by the actual controller,the restriction period for employees,the warning of share price floating loss and other binding provisions,and raise the threshold of underwriting increase. |
