Case Study Of Related M&A From The Perspective Of Major Shareholders' Tunneling

In China's capital market,due to the lack of a legal mechanism that is strongly binding on the behavior of major shareholders,it is not uncommon for small and medium-sized shareholders to be exploited.If the equity of a listed company is excessively concentrated,the controlling shareholder will often use his position to transfer the resources and profits of the list ed company to his own hands in a certain way.In this way,it will harm the interests of small and medium investors.Among the behaviors of major shareholders in the transfer of interests,the associated transactions are highly concealed and become the most commonly used means.Affiliated Mergers and Acquisitions(M&A)are a kind of M&A that have the characteristics of connected transactions and are different from the related transactions in the daily operations of enterprises.On the one hand,the reorganiz ation of internal assets under the associated M&A will help the Group re-integrate existing resources and maximize the use of resources.On the other hand,compared with general related transactions,the transaction process is usually more complicated,and the amount is often larger.The counterparties are mostly the largest shareholder or actual controller.It is likely that major shareholders will manipulate the merger and acquisition method.,trading prices and other means,encroachment on the interests of small and medium shareholders of listed companies.Due to the serious asymmetry of information between major shareholders and small and medium-sized shareholders,it is often only when the M&A plan is implemented that it can cause everyone's doubts.In addition,there are currently no regulatory rules and regulations for affiliated M&A in the securities market.Therefore,studying the short-selling methods of major shareholders in(M&A)and the economic consequences thereof have a very positive effect on improving corporate governance and protecting the rights of minority shareholders.This article takes Bairun's affiliated merger and acquisition of Bacchus as an example.Combining the institutional background of mergers and acquisitions and the theoretical and research results of major shareholders' short-selling,it analyzes the motives,processes and associated mergers and acquisitions of major shareholders.Analyze the problems existing in Bairun's corporate governance,and draw conclusions and make recommendations based on this.Through research,it was found that the majority shareholder of Bairun Co.,Ltd.first obtained 100% equity of its subsidiary Bacchus Wines from the listed company through non-fair related party transactions on the grounds of “insolvency”.Five years later,Bairun shares,which had been successfully listed,repurchased 100% of the shares of Bacchus Wines at a transaction price of 4.945 billion yuan by issuing shares to purchase assets.The major shareholder of Bairun shares not only obtained high profits in one purchase and one sale,but also further increased its shareholding ratio,diluting the equity ratio of other small and medium investors.The major flaws in Bairun's corporate governance are also the main reasons for this short-selling.Based on this,we conclude that there is not only a certain theoretical connection between affiliated M & A and the short-selling behavior of major shareholders,but also there is a certain basis in reality.Therefore,in reality,related mergers and acquisitions tend to become an important means for large shareholders to sell short.When listed companies have serious governance defects and major shareholders lack corresponding checks and balances,the legal environment,small and medium-sized investors,board of supervisors,independent directors,and evaluation agencies have limited restrictions on the short-selling behavior of major shareholders based on affiliated mergers and acquisitions.Good governance effect.