Research On The Opportunistic Behavior Of Management In Share Repurchase

Since the CSRC amended the Company Law in October 2018,the system of share repurchase has been more relaxed and the legal system has been more perfect than before.More and more listed companies in China have conducted share repurchase for the purpose of market value management,equity incentive and capital structure change.However,some scholars have found that many companies use share repurchases to seek private interests,maximize personal interests,privately encroach on the interests of small shareholders,and undermine the balance of the capital market.Therefore,for China’s current capital market,the first step is to curb the occurrence of stock repurchase chaos.The author first reviewed the research on share repurchase at home and abroad,summarized the market reactions caused by share repurchase,listed the theoretical basis that may be used in this article,introduced the development process of China’s share repurchase system in detail,and compared the differences with foreign share repurchase systems.The main purpose of this article is to introduce the operating mechanisms and influencing factors of the share repurchase system at home and abroad,so that readers can better understand and evaluate the effectiveness and limitations of the systems.On this basis,this paper takes listed company A Co.,Ltd.as an example,introduces the top ten shareholders and actual controllers of A Co.,Ltd.,analyzes the company’s four major financial indicators,and evaluates the company’s consolidation and development level.Analyze the short-term and long-term economic effects of this share repurchase,and the opportunistic behavior caused by the short-term economic effects of this share repurchase event.Based on the above analysis results,put forward suggestions on the design of the share repurchase plan of listed companies,and put forward suggestions on the laws and regulations of share repurchase,so as to reduce the phenomenon of false repurchase and management opportunism,It can better safeguard the interests of small and medium-sized shareholders and the long-term stable development of the capital market.Through the study of the case company,it is found that: first,the purpose of share repurchase of A Co.,Ltd.is not true;Second,during the share buyback period of the company,senior executives may take the opportunity to reduce their holdings for personal gain;Third,investors cannot effectively identify the authenticity of share repurchase.