| More and more companies listed on the NEEQ(National Equities Exchange and Quotations)have been transferred to the other market since 2017 in China.In response to the strong willingness of NEEQ companies to transfer to the higher board,the China Securities Regulatory Commission has issued more complete and convenient transfer rules to help capital market steadily build a multilevel and diversified pattern.However,after sorting out the actual raised funds’ use of 31 NEEQ companies that have been transferred to the other board,it was found that many companies did not make good use of the funds after raising a considerable scale,and the use efficiency of the raised funds was not high,which violated their pursuit of development.It has also harmed the interests of small and medium investors,and at the same time weakened the role of the capital market in effectively allocating funds which is worth paying attention to.The company called Beilu Pharmaceutical is selected as the case of study in this paper.It successfully transferred to Growth Enterprise Market in only 3 months,which means the fast growing company has successfully turned to the higher-level capital market at a time when it needs the capital investment most.And the time need for an approval,which can be too long to ruin an project,also gives no barrier to the company.But Beilu Pharmaceutical did not use the raised funds as efficiently as expected,which makes no contribution to the company’s long-term growth.In order to explore the problems,effects and reasons of inefficiency in the actual use of raised funds,the overall research framework is formed through sorting out and summarizing relevant literature,concepts and theories in the first part of this paper.The use of funds raised from Beilu Pharmaceutical’s transferring to the other board is analyzed in the second part.On the one hand,through summarizing relevant announcements,it is found that there have been significant changes in the investment direction and slow progress of projects during the investment process,which not only delayed the time of capital investment to generate economic benefits,but also increased inefficient idle capital.On the other hand,through the analysis of financial and non-financial indicators,it is concluded that the overall output benefit of projects was unsatisfactory,and the two together led to the inefficient use of raised funds,which is consistent with the result of the data envelopment analysis(DEA).The causes of these problems are analyzed in the third part of this paper,including the fact that the company faces the more relaxed financing environment after turned to the higher-level capital market,which led to a large amount of raised funds,and the company’s inadequate project feasibility analysis,faulty fund management system and unreasonable financing structure together led to inefficient use of raised funds.In addition,the institutional dysfunction of the Growth Enterprise Market also exacerbated this phenomenon,which mainly includes weak follow-up supervision of replenishing working capital,unclear requirements for the quality of information disclosure,and weak penalties for companies that violate regulations.In general,Beilu Pharmaceutical’s use of funds raised from transferring to the other board is inefficient.In order to help more companies pay attention to and avoid the inefficient use of funds in the future,relevant suggestions from the perspectives of companies and regulatory authorities are put forward in this paper.On the one hand,companies planning to transfer to the other board should pay attention to the project planning,investment supervision and adjustment of financing structure.On the other hand,the regulatory authorities should strengthen the preliminary review,process supervision and post-event punishment,and strictly control the information disclosure throughout the process. |
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