Object Of Private Placement,Sponsor Reputation,and Discount Rate Of Private Placement

After the reform of non-tradable shares,there has been an upsurge of Private placement of Listed Companies in China.China's listed companies have a high degree of ownership concentration,and the phenomenon that a large shareholder controls the whole company becomes more popular.It is difficult for small and medium shareholders to effectively check and balance the behavior of large shareholders.In addition,on the whole,China's legal protection for small and medium-sized investors is relatively weak.under this environment,the conflict of interest between controlling shareholders and minority shareholders is particularly obvious.Compared with the rights issue and public issuance,the auditing procedure for Private placement is relatively simple,and the requirements for information disclosure are relatively low.Therefore,in the process of Private placement,large shareholders with control rights have conditions and motives to damage the interests of small and medium-sized shareholders,to maximize their own interests,that is,to carry out "interest transmission".When the subscription proportion of major shareholders in the private placement is larger than that of the shares held in the listed company before the private placement,the discount rate of private placement will increase the wealth of the major shareholders.Therefore,the major shareholders have the opportunistic motive to depress the issue price and realize wealth transfer by subscribing shares at a low price.Therefore,the price determination of Private placement becomes the "window" for large shareholders to carry out "interest transmission".Most scholars have studied the relationship between investor identity and information asymmetry and the discount rate of private placement.However,few scholars have used the reputation of sponsor representatives as a regulatory variable to study private placement.The relationship between discount rate and the identity of investors who subscribe to the Private placement.At the same time,the role of Check-and-balance of ownership in academia is mostly related to corporate performance.This paper points out that the existence of dominant shareholders can restrain the large shareholders with control rights from purchasing Private placement of stocks at low prices,thereby damaging the interests of small and medium-sized shareholders.Finally,the research on the impact of Private placement price makes a supplement in this field.In this paper,we take the companies that issue shares through Private placement in China's securities market as samples,and study the relationship between the discount rate of Private placement of new shares and the identity of investors who subscribe for Private placement theoretically and empirically.We also study the relationship between the discount rate of Private placement of new shares and the identity of investors who subscribe for Private placement of new shares as adjusting variables.On the basis of reviewing the current research situation at home and abroad,this paper expounds the concept of Private placement,the basic theories of sponsor reputation and Check-and-balance of ownership,and analyses the mechanism of sponsor reputation and Check-and-balance of ownership influencing price in Private placement on the basis of control rights income theory,information asymmetry theory and financial intermediary reputation theory.Then,based on the theoretical analysis of the relationship between the discount rate of Private placement and investor identity,the reputation of sponsors and Check-and-balance of ownership,the theoretical hypothesis is put forward,and the hypothesis of theoretical analysis is tested by the empirical samples of the companies of Private placement of stocks in China.On this basis,the research conclusions are drawn and relevant policy recommendations are put forward.Through theoretical and empirical analysis,we can draw three conclusions:(1)the higher the reputation of the sponsors of Private placement of new shares,the smaller the difference between the discount rate of Private placement of new shares to controlling shareholders and their related shareholders and the discount rate of Private placement of new shares to non-related shareholders;(2)the higher Check-and-balance of ownership,the higher the Private placement of new shares to controlling shareholders and their associated shareholders.The discount rate of Private placement of new shares is lower.In view of the above conclusions,this paper puts forward relevant suggestions.The supervision department can require more information disclosure of Private placement,increase the punishment of sponsors for "recommending only but not sponsoring";vigorously cultivate institutional investors to play the role of Check-and-balance of ownership,and reduce the behavior of conveying interests for controlling shareholders and their associated shareholders in Private placement.This paper is divided into six parts.Introduction is the first part,which includes the research background,research ideas and research framework.The second part summarizes the relevant literature on the discount of private placement,the reputation of sponsors and the ownership structure.The third part introduces the theory of target,sponsor's reputation,ownership structure and discount rate of private placement.The fourth part analyses the relationship between the target,the sponsor's reputation,the ownership structure and the discount rate of the private placement,and explains theoretically how the reputation of the sponsor and the checks and balances of the ownership affect the discount rate of the private placement and the discount rate of the private placement.The fifth part is empirical analysis.This paper draws a conclusion by building a model and multivariate regression analysis of the model.The sixth part is the summary of the whole paper and the suggestions based on the conclusions,at the same time,it puts forward the shortcomings of this paper.The contribution of this paper lies in: Previous literature studies on the discount rate of private placement of listed companies mainly focused on the causes of discount offering to private placement target and the study of interest transmission behavior of large shareholders through the selection of pricing benchmark date,earnings management,asset injection and other ways of manipulating the discount rate of private placement,but few scholars have studied it.What factors can inhibit the large shareholders' interest transmission behavior in directional issuance of new shares? This paper will study whether the reputation of sponsor representatives and equity balance can inhibit the related shareholders' manipulation of the discount rate of directional issuance of new shares to carry out interest transmission.This paper examines the role of high reputation sponsors and high equity checks and balances companies in inhibiting the interest transmission to controlling shareholders and their related shareholders in directional issuance,thereby preventing large shareholders from manipulating the discount rate of new shares,which can strengthen the supervision of directional issuance of new shares,and provide a new direction for large shareholders to manipulate the discount rate behavior;at the same time,it helps the directional issuance system and supervision and administration.Policy and the improvement of sponsor system and equity structure of listed companies.