Information Disclosure Of Affiliate Transaction And Governance Defect In Private Listed Company

The quality of information disclosure of listed companies is an important issue for academics and investors. Quality of information disclosure is a combined effect of external governance and inner company, there are some causal relationship between them. With the development of China’s capital market, the number of private listed companies has increased in recent years, as of December31,2012, the number of A-share private listed companies from Shanghai and Shenzhen has reached1,354, with a proportion of57.47%, private listed companies have become the part and parcel of the A-share listed companies. With the continuous development and growth of private enterprises, the introduction of external talent to participate in the company’s decision-making on major issues, would increase the agency costs, which reflects the shortcomings of private corporate governance efficiency.Currently the research quality of information disclosure and corporate governance standards, few scholars are concerned that China’s private enterprises in information disclosure. Most scholars have focused on the study of factors affecting information disclosure issues and economic consequences for the private corporate governance rating is only limited to individual indicators. Corporate governance can be achieved by the company structure, governance mechanisms and governance efficiency three dimensions of governance comprehensive analysis and judgment, but the existing literature is carried out from a single perspective, such as the proportion of large shareholders, the Board of independence, do not do it from the perspective of a comprehensive evaluation, and most scholars have focused on foreign literature to follow, and have not combined with a special institutional background of the analysis, and no defects and deficiencies to look at corporate governance issues from the perspective of information disclosure, not Some scholars for study and discussion of individual cases.In this paper, Foshan Lighting is a typical representative of private enterprises, the study is based on the core issues related party transactions to conceal this event as the starting point, combining the characteristics of ownership structure and chain structure of private enterprises, research conceal its occurrence disclose the root cause of the problem thus discuss and evaluate the governance structure of private enterprise, governance, management efficiency and other aspects of defects and deficiencies. Specific studies will be divided into related party transactions platform analysis, analysis of motives related transactions as well as private corporate governance deficiencies discussed in three parts. The study found:(i) industry chain node determines the profitability of the enterprise model for the occurrence of related party transactions provide convenience;(ii) motives related transactions listed company funds transfers, and cash dividends have the same motivation;(iii) defects are associated with corporate governance the root of the transaction occurred, internal control is the direct cause, oversight mechanisms imbalance is the root cause.This article and the previous studies differ, innovations are:(i) disclosure of information from the perspective of the problem of China’s private enterprises to explore deficiencies in corporate governance;(ii) from a comprehensive point of view to a comprehensive analysis to determine the level of corporate governance. Significance of this study is:(i) can solve the problem of conflict management and shareholder interests, safeguard the interests of shareholders;(ii) improve the efficiency of the board, making it the majority shareholder on behalf of the interests;(iii) private governance of listed companies to provide a useful reference and inspiration.