Private Placement, Asset Injection And The Transfer Of Benefits

China Securities Regulatory Commission promulgated May 8, 2006 and implemented the "Administrative Measures for the issuance of securities of listed companies", first proposed management approach, "listed companies to issue securities may take the form of non-public offering to specific objects, that private placement," which marks this new placement equity financing of Chinese securities market officially set foot on stage. Private placement of its freedom of choice issue objects, profitability requirements not specified, raising unlimited advantages quickly by the listed company’s favor, in addition to the specific object of private placement in addition to the option to subscribe for new shares with cash directly, you can also opt assets to subscribe for new shares, to achieve complete assets into the listed company. However, the majority of listed companies are major shareholders to choose private placement, and large shareholders often choose to use assets to subscribe for new shares, which makes private placement of assets into related party transactions has become a double. Due to China’s relevant laws and regulations and systems, and is likely to be the major shareholder in this double transfer of benefits associated with the transaction, and against the interests of minority shareholders of the listed company.This paper selects Sheng Tun mining as a case study, Sheng Tun mining in the 2010-2014 five-year period have been completed and four private placement, the paper will be followed by two successive private placement of assets into the study, analysis Sheng way in Tuen Mining private placement of assets into the process of the existence of transfer of benefits and consequences. This paper introduces the research background and significance, and analyzed the domestic and foreign literature and research related to this article, including the relationship between motivation and private placement announcement effects, as well as private placement, asset injection and transfer of benefits between. Secondly, for the private placement, asset injection and the concept for the transfer of benefits to the statement, and effect theory based supervision, the second agency theory and asymmetric information theory provides an overview of the way of private placement of assets into the presence of the transfer of benefits. Thirdly, to Sheng Tun mining as a case study, we analyze the way followed by two private placement of assets into the existence of transfer of benefits, and by using event study and analysis of financial indicators of transfer of benefits arising consequences were analyzed. Finally, this paper summarizes the conclusions and deficiencies, and put forward relevant suggestions and comments.Based on Sheng Tun mining as a case study we found that the presence of Sheng Tun mining assets into the private placement to large shareholders during transport behavior, conduct of transfer of benefits are mainly low-quality asset injection, injection over inflated asset values, minus the major shareholder cash holding behavior, major shareholders to set up shell companies and assets into the listed company private placement carried out before and after the distribution of profits. Due to the existence of transfer of benefits cases, private placement of assets into the announcement Sheng Tun mining did not show a significant positive announcement effect, and high non-performing assets injection undermined the long-term operating performance of listed companies. This article targeted policy recommendations, including sound placement constraint regulatory mechanisms, strengthen inject asset quality assessment, strengthening small and medium investor education.