An Empirical Study On The Impact Of Major Shareholder Subscription Behavior On The Directional Issuance Discount Rate

Before 2005,The private placement on Chinese capital market is rare and not on regularity,but after that year,with the Shareholding Reform and a series of regulations on the issuance of private placement take into effect,the private placement in China growing in pace.From 2013 onwards,China’s private placement taken by listed companies showed a blowout growth.In 2015,the number of private placements increase to nearly 900,compared with 2014,has nearly a 100% growth rate,and almost equal to the total number of 2008 to 2012.However,with the explosive growth,chaos followed by.Major shareholders steal the wealth of listed companies through the private placement which cause unfair to other investors and disturb the market order.The reason for this situation is that China’s capital market is immature,the ownership structure of listed companies is unreasonable,the corporate governance management is not perfect and the lack of rational investors.But the root of this problem is that there is a large amount of arbitrage space in the private placement which stimulates the self-interest motive of the large shareholders.Therefore,it is of great significance to explore how the major shareholders can grab the interests of listed companies through private placement.At present,the research on the issuance of private placement at home and abroad mainly focuses on the announcement effect and long-term impact of short-term performance on stock market.The research on how majority shareholders steal wealth from the minority shareholders is mainly focused on asset erosion and special financial arrangement.Together,the studies from both sides to research how large shareholders grab benefits from listed companies via private placement are not so many.Even in those studies,the conclusion of how large shareholders affect the private placement is not clear.Based on the previous research,this paper chooses all the samples of Shanghai and Shenzhen A shares from 2012 to 2015,eliminate samples of incomplete data at a total number of 1186,to study the relationship between proportion of major shareholders and the discount rates of private placement.The results show that there is a significant positive correlation between the major shareholders’ subscription and the discount rate of private placement,which indicates that the large shareholders do obtain the excess returns from the shares of the listed companies via the influence they have to the companies in the course of the private placement.At the same time,the market can recognize the large shareholders’ self-interest motivation in the private placement,and take a negative attitude to their subscription behavior,so that the private placement can not achieve the optimal efficiency.Therefore,in order to protect the interests of small and medium shareholders,and in order to make the additional issuance can play a better role as well,it is necessary to develop more stringent relevant provisions,so that the process of additional pricing can be fairer to all investors.