Discussion On The Issue Of Interest Transfer In Related Mergers And Acquisitions Of Listed Companies

Owing to the highly centralized ownership structure of Listed Companies in China’s capital market,the issue of control rights has become the main research direction of corporate governance.Therefore,the agency problem of large shareholders and small shareholders has become increasingly prominent.The interests of small and medium-sized shareholders will be eroded by large shareholders using absolute control through various ways,which is accompanied by the hidden characteristics of interest transmission.In order to restrain this kind of behavior,the regulatory authorities have formulated corresponding laws and norms.For example,the Company Law dilutes the controlling power of the major shareholders by stipulating the responsibilities of the major shareholders and restricting the affiliated transactions of listed companies.Because laws and regulations themselves are lagging behind and interest transmission is concealed,laws and regulations can not eradicate the behavior of interest transmission,but can only play a mitigating role.This phenomenon is caused by the lack of comprehensive understanding of the complex transaction mode of interest transmission by the regulatory authorities,so it is of great significance to study.Based on information asymmetry theory,agency theory and control theory,this paper chooses related mergers and acquisitions cases of Dazhihui Company,and uses single case study method to analyze the whole process of mergers and acquisitions.Through the way of conveying benefits to controlling shareholders in the process of large-wisdom related mergers and acquisitions,the impact of large-wisdom related mergers and acquisitions on shareholders’ wealth is discussed.Analysis is carried out to explore how great wisdom can transfer interests.From the perspective of related mergers and acquisitions,this paper analyses the reasons why major shareholders encroach on the interests of small and medium-sized shareholders,including: defects in corporate governance;defects in the system and supervision of mergers and acquisitions of the Securities Regulatory Commission(SFC);and inadequate supervision of intermediary institutions.this paper through out some suggestions on preventing the transfer of large shareholders’ interests through analyzing the above problems.Considering the current situation in China of listed companies,the paper can protect the interest of investors.This paper combines normative research and case studies.For normative research,this paper reviews and summarizes domestic and foreign literatures,sums up the types of M&A of listed companies,summarizes the causes and means of the transfer of listed companies’ interests to major shareholders,and analyzes information asymmetry theory,agency theory,The theory of control is elaborated.In the case analysis part,the DZH related M&A events are taken as the research object,and the characteristics,causes and consequences of the transfer of interests by DZH related mergers and acquisitions are analyzed.Through the analysis of the cases of DZH related M&A,this paper concludes:(1)to continuously improve the corporate governance structure to prevent listed companies from transferring benefits to major shareholders;(2)to further improve the supervision mechanism of related mergers and acquisitions;3)It is necessary to strengthen the responsibility of intermediaries for the supervision of related mergers and acquisitions;(4)to protect the interests of small and medium shareholders in mergers and acquisitions.This article includes five parts.The first part is the introduction,which contains research background,research significance,research methods and framework,as well as related literature review of listed companies’ mergers and acquisitions and interest transfer,summarizing the main purpose of affiliated mergers and acquisitions of listed companies in China,leading to "empty" behavior..The second part is a theoretical overview of the interest transfer in the related mergers and acquisitions of listed companies in China.It summarizes the types of M&A of listed companies,summarizes the reasons and means of the transfer of listed companies to the interests of major shareholders,and analyzes the theory of information asymmetry and agency theory.The theory of control rights is elaborated.The third part is the case introduction of the benefit transfer in the DZH related mergers and acquisitions.The fourth part is the case analysis of the benefit transfer in the DZH related mergers and acquisitions.The fifth part is the transfer of interests to the major shareholders in the related mergers and acquisitions of Great Wisdom Co.,Ltd.Conclusions and the implications gained from them.