A Study On The Behavior Of Interest Expropriation Under Management Buy-outs

In the 1990 s,MBO was introduced into China,at that time,it was the stage of China’s economic system transformation,and the reform of state-owned enterprises set off an upsurge,in order to make enterprises become real market subjects,reduce the principal-agent cost,improve the efficiency of the enterprise and accelerate the orderly withdrawal of state-owned capital in competitive industries,many state-owned enterprises adopt the method of management acquisition to carry on the reform.However,in the practice of MBO in China,more and more problems of unfair asset pricing,transfer financing risk,high dividend and so on are exposed.Although the state clearly restricted the transfer of state-owned property rights to the management in 2005,China’s management buy-outs has never stopped,and in recent years,more and more management buy-outs have exposed the problem of interest encroachment,it not only damages the legitimate rights and interests of minority shareholders,but also hinders the healthy development of the capital market.Therefore,it is very urgent and important to study the behavior of interest encroachment under MBO.Based on the research results of MBO and interest encroachment at home and abroad,this paper analyzes the case of MBO of Shuijingfang according to relevant theories.Firstly,the paper points out six means of interest encroachment in the process of Shuijingfang management acquisition.Secondly,it introduces the general situation of the company,and then analyzes the process of implementing the MBO in Shuijingfang,including the subject,capital source and implementation path of MBO.Thirdly,This paper analyzes the motivation and conditions for the implementation of the benefit embezzlement under the MBO of Shuijingfang,in order to reveal the economic consequences of the encroachment,the financial index method is used to analyze the influence of the acquisition on the business performance of the enterprise,using the event study method to calculate the cumulative excess return rate,observethe response of the capital market,and analyze how the interest encroachment leads to the loss of state-owned assets,comparing with the performance of enterprises in the same industry to evaluate whether the behavior of interest encroachment restricts the development of enterprises.Finally,according to the case study,the specific conclusions are drawn,and the following management implications are proposed:broaden the financing channels of MBO,improve the management incentive system of listed companies;improve the evaluation and pricing mechanism of state-owned property rights;strengthen the supervision of MBO and establish and perfect relevant laws and regulations;optimize the corporate governance structure;strictly regulate the information disclosure system of listed companies.