Research On Hailunzhe High Premium M&A And Tunneling Of Major Shareholders

China’s capital market M&A activities reached a new round of M&A climax in2015 with the active market economy and the support of M&A policies.In order to promote the extension development of enterprises,M&A activities are increasingly developing in the direction of high premium.However,in recent years,there have been frequent problems in high-price mergers and acquisitions,major shareholders and senior executives colluded in financial fraud to transmit benefits,and the principal-agent problem between major shareholders and small and medium-sized shareholders has intensified.At present,the research on the tunneling of major shareholders and high-priced mergers and acquisitions is mostly focused on the analysis of motivation and economic consequences,and there is less analysis on the path of tunneling of major shareholders through high-priced mergers and acquisitions.In this paper,the research object is Hailunzhe’s multiple high-priced mergers and acquisitions,and how major shareholders can empty listed companies through high-priced mergers and acquisitions.The hollowing out of major shareholders in Heirenzhe’s high premium merger and acquisition can be divided into two stages: In the first stage,Hailunzhe obtained funds from the major shareholders to acquire Lianshuo Technology through a fixed increase.Hailunzhe suspended trading for a long time and offered a low increase to the major shareholders at a price of 6.86 yuan per share.The major shareholder Ding Jianping directly holds 4.3% of the company’s shares through this fixed increase,and after the increase,holds 24.83% of the company’s shares directly and indirectly through Jiangsu jidian.In the second stage,the major shareholders first make a high proportion pledge to obtain funds when the stock price is high.Then,the major shareholders suddenly invest in three companies,including Xinyu Intelligent,Dongguan Jinxun,and Yisheng Robot.Finally,Hailunzhe Cash acquires the company that the major shareholders suddenly invest in at a high premium.The ultimate major shareholder hollowed out the listed company through two-stage high premium mergers and acquisitions.This article identifies the following characteristics of potential tunneling by major shareholders through the study of Hailunzhe’s high premium mergers and acquisitions:(1)Long term suspension of trading before targeted issuance to major shareholders suppresses stock prices,and major shareholders increase their holdings at low prices.(2)High premium mergers and acquisitions may also further overestimate the underlying assets.(3)After the abnormal increase in the company’s stock price,major shareholders significantly increased the proportion of equity pledge.(4)Major shareholders rushed to invest in non related enterprises,which quickly injected high prices into listed companies after mergers and acquisitions.(5)Continuous mergers and acquisitions,especially in cross period related party mergers and acquisitions,have stretched the merger timeline and increased the concealment of major shareholder hollowing out.Finally,four suggestions are proposed from the regulatory perspective:(1)Focus on regulating the "three highs" M&A activities.(2)Significantly increase the cost of violating laws and regulations,and accurately punish those involved in tunneling behavior.(3)Pay attention to the risk of high stock price and delayed fund flow for major shareholders.(4)Pay attention to the behavior of major shareholders rushing to acquire target assets and injecting them into listed companies at high prices...