Research On The Risk And Prevention Of Performance Commitment In Corporate Mergers And Acquisitions

With the rapid development of economy,M & A is widely used as a means of enterprise expansion,which leads to the rapid growth of M & a transaction scale.At the same time,in order to regulate M & A transactions and protect the interests of small and medium shareholders,the state has introduced the performance commitment system.However,in recent years,in order to successfully complete mergers and acquisitions,many companies wantonly promote "high premium,high target" projects,resulting in frequent performance commitment risk events,which seriously infringe on the interests of small and medium shareholders.At present,on the one hand,the problem of performance commitment occurs frequently,on the other hand,the market and investors have insufficient understanding of the risk of performance commitment.Therefore,what kind of risk does performance commitment have? How to prevent such risks? It becomes the key to deepen the risk awareness of performance commitment,enhance the effectiveness of performance commitment and protect the interests of small and medium shareholders.Shenzhou Great Wall,the case company,started to expand its high debt since it signed the performance commitment in 2015.The "accurate" completion of the performance target value,improper earnings management,and performance fraud are all representative performances of Shenzhou Great Wall.Based on the Overconfidence Theory,information asymmetry theory and risk management theory,this paper first combs the relevant literature,then defines the concept,and then through the segmentation identification method,taking the stage of performance commitment as the segmentation standard,starting from the process of performance commitment,combined with the actual situation of the case company,from the aspects of performance commitment before signing,performance commitment period and performance commitment period The last three stages explore the existing risks.The results show that: before the signing of performance commitment,there are mainly industry risk,underlying asset valuation risk and performance commitment target value setting risk;during the performance commitment period,there mainly are management shortsightedness risk,earnings management risk and performance fraud risk;after the performance commitment period,there mainly are compensation payment risk and financial distress risk.Based on the above conclusions,this paper gives the corresponding suggestions before,during and after the performance commitment period.It includes the investigation of industry situation and development potential in advance,the scientific design of performance commitment agreement,the standardization of the operation mechanism of the board of directors,the guarantee of the effectiveness of the internal control system,the establishment and improvement of the independent director and external supervision mechanism,and the increase of punishment for illegal acts.This paper reveals the possible risks when the listed companies sign and complete the performance commitment,improves the risk awareness of the market and listed companies,and has a good reference significance for further standardizing the performance commitment system.