Research On Tunneling In The Process Of Private Placement—Based On The Case Analysis Of Mason Technology

The financing method of private placement is only officially appeared in China’s financing market after the official implementation of the relevant management measured by the China Securities Regulatory Commission in 2005.In the past few years,the new financing method of private placement has developed rapidly and has been recognized by many listed companies with financing needs.The reason is that it has the unique characteristics of simple and efficient procedures,low cost of issuing,convenient operation and easy to use.Moreover,China Securities Regulatory Commission has stipulated that the private placement of listed companies must have a certain period of lock-up period.The regulation has made the stock price relatively stable to a certain extent.However,the concentration of equity is high,the power of large shareholders is too large,and the lack of strength of small and medium-sized shareholders to compete with major shareholders is a significant problem in most listed companies in China.In China,the capital market started relatively late with foreign countries,and The policy of private placement is late,and it is still not mature enough.The relevant laws and regulations are not sound enough to constrain and supervise the behavior of private placement.The major shareholders of listed companies will drill these “empty” and breed.Out of interest delivery issues.In China,the means used by the major shareholder to use the private placement to carry out the interest transfer are unfair,the large share of dividends after the issuance,and the arbitrage of large shareholders.These means not only infringe on the legitimate interests of small and medium shareholders,but also threaten the stability of the capital market.In this context,we still need to conduct in-depth research on the issue of interest transfer in private placement.This paper takes the case of Shenzhen Wanrun Technology Co,Ltd.(stock code: 002654,hereinafter referred to as “Wanrun Technology”),which is engaged in the LED and Internet industries,as an example.The information asymmetry theory and principal-agent theory are used as the theoretical basis.Based on many domestic and foreign related literatures,further analyze and study the interest transfer problem of Wanrun Technology in private placement.First of all,this paper makes a brief analysis of the phenomenon of privately-issued benefits transmission of listed companies in China,and refers to the harms of interest transfer behaviors in the private placement of listed companies in the emergence stage.Secondly,the case of Wanrun Technology’s private placement is introduced.The purpose,object,process and motivation of the secondary private placement were introduced and analyzed.Then,through analysis and research,it was found that Wanrun Technology had an unreasonable increase in the share price in the private placement,and there was a large dividend during the fixed increase period.Reduced arbitrage and other phenomena,determined that Wanrun Technology did have a benefit transfer behavior in the process of private placement,and issued a warning letter to its two major shareholders on January 13,2016,constraining its reduction behavior,further It confirms the interest transfer behavior of Wanrun Technology.Finally,through the analysis of the changes in financial indicators before and after the private placement of Wanrun Technology,it is found that the interest transfer behavior in this fixed increase will have a certain negative impact on the financial aspects of the enterprise.Through a comprehensive and thorough analysis of this case of Wanrun Technology,it is concluded that due to the imperfect legal system of China’s private placement and the inadequacy of supervision and the imperfect pricing mechanism of private placement,the majority shareholders are in the interest.Driven by the interest transfer behavior.Therefore,combined with the characteristics of Wanrun Technology,the following suggestions are proposed for the issue of private placement of benefits in China’s listed companies: first,the pricing mechanism needs to be regulated;secondly,the monitoring of major shareholders’ reduction behavior is increased;Third,the dividends after the private placement will be strengthened;Fourth,increase the protection of small and medium investors.