The Study Of Tunneling In Wolong Electric's Private Placement

After the split share reform,the issuance of private placement is flexible,the issuance condition is low,the convenience of the audit procedure is sought after by the listed company,and becomes one of the most popular ways of refinancing.A variety of ways to subscribe,more and more large shareholders choose to take the assets as a consideration,the high-quality assets injected to the listed companies to reduce the industry competition and related party transactions,to improve the listed company's industrial chain,expand its size and improve business performance.However,the private placement involves the reallocation of equity and resources between the original shareholders and the new shareholders,and the ownership structure of the listed companies in China's capital market is concentrated.The conflict between the major shareholders and the small shareholders is more serious.The major shareholders have the ability to infringement the small shareholders,so the majority of shareholders is likely to be through the private placement to carry out the interests of delivery,coupled with private placement in China's capital market development time is short,the system is not perfect,which is provide opportunity to tunneling the listed company.In this paper,the analysis of Wolong Electrical directional issuance process to explore whether the controlling shareholder transfer of benefits in the process of private placement,as well as the way of interest delivery,and then analyze the impact of such behavior on the value of the company.It is found that there are the possibility of interest transmission in both theoretical and practical processes when the issuer of private placement includes large shareholders.Wolong Electric purchase the assets from the controlling shareholder,it did not bring the driving force for the development of listed companies,but the listed company's asset quality has decline,so that its performance decline,and private placement has become a benefit transfer tool to the controlling shareholder to transfer the benefit to himself.The controlling shareholder through to inject the low-quality assets to listed companies,manipulation of new shares issued price,the use of cash means to carry out the interests of the transfer after private placement,hit the value of listed companies,against the interests of small shareholders.Through the study of this issue,let the minority shareholders understand the way of tunneling by the controlling shareholder in the private placement,enhance the self-protection consciousness of the minority shareholders;provide the theoretical basis for the supervisory department to perfect the relevant system of private placement;to provide some reference recommendations to improve the development of Wolong Electric's future and to improve the company's governance level,and promote the company's long-term development.