Research On Major Shareholders’ Profit Encroachment In Performance Commitment Of Listed Enterprises’ M&A

In today’s increasingly fierce market competition,many enterprises choose the route of merger and reorganization in order to pursue faster development,reduce transaction costs and realize economies of scale.Performance commitment is widely used in M & A transactions as an effective means to protect the interests of M & A parties and minority shareholders.However,the performance commitment agreement is not always able to play an effective role.When the performance of the underlying assets does not meet the expectations,there is a phenomenon that major shareholders take advantage of the unequal information to "live beyond their means" and sacrifice the interests of long-term planning and minority shareholders to forcibly "fulfill" the performance commitment.These persistent problems are also the focus of many researchers.This paper selects Day-bright Intelligence as the research object,adopts literature analysis method,case study method and financial index analysis method;guided by the principal-agent theory,information error theory,hollowing theory and incomplete contract theory,tracing the process and intuitive problems around the vicious cycle of "high performance commitment and interest occupation of major shareholders".Focus on the logical relationship between the performance commitment and the interest encroachment of major shareholders,and then analyze the special features of the interest encroachment in the high performance commitment,as well as the causes,methods and hazards of the interest encroachment of major shareholders.It is found that there are four main ways to occupy the interests of major shareholders of Daybright Intelligence: putting together "accurate completion" to complete the performance commitment,using strong concealment of related party transactions to cash out the acquisition target,and concealing non-operational occupation of funds.The consequences mainly include: the decline of the company’s business performance,the damage to the interests of minority shareholders,the decline of the company’s ability to resist risks,the collapse of the company’s management,and the risk of the transfer of control.In this paper,through the research found that high performance commitment in mergers and acquisitions will increase the pressure of the party,and the existence of the cumulative effect,the pressure is gradually increasing,when the management(big shareholders)found the underlying assets performance expectations,performance promises to deliver,often adopt a series of measures to "complete" performance commitment phenomenon,and objectively to small and medium-sized investors interests.In order to prevent the failure of the performance commitment,this paper puts forward countermeasures from five aspects based on the moving forward pass: first,carry out the merger and acquisition and investment and financing activities carefully;the second is to standardize the information disclosure system and disclosure content;improve the internal governance;fourth,improve the performance commitment and supporting mechanism;and fifth,increase the service guarantee and supervision.Through the development of this research,it hopes to provide practical reference for how to choose the merger targets,and play some warning role for the small and medium investors to identify the false performance commitment and put an end to the inferior investment.