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Based on the controlling shareholders of the benefits of control and ultra-control benefits theory behavior analysis

Author: YangMing From: www.yourpaper.net Posted: 2009-07-17 13:10:09 Read:
Abstract: major shareholders against minority shareholders for a long time, but has been caused Analysis omissions on shareholders' control over the one-sidedness of the analysis results. Sought through the use of control benefits and super benefits of control theory, a profound analysis of the behavior of the controlling shareholders to propose governance policy recommendations for the expropriation.
Keywords: control benefits; super control benefits; controlling shareholder

Theory of
1 benefits of control and ultra-control benefits

Big as the company's controlling shareholders, the cash flow right outside investors, and did not get it holds a larger share of the stock of the company to bring the risk premium. Benefits of control is defined as control over the cost of compensation for the controlling shareholders. As the company controlling shareholders control benefits available, based on the assumption of rational economic man, the controlling shareholders of the company will not meet the just compensation cost control, controlling income. Controlling shareholders control over to grab over controlling revenue ultra control benefits. This is based on the incentive to maximize the interests of the major shareholders, relying on the behavior of the control over the power has nothing to do with control over the cost of compensation for large shareholders to compulsorily acquire more than the benefits of control over the income. Control benefits as well as the characteristics of the super-control benefits contrast as follows:
(1) control benefits is a reasonable return, and the the ultra control of income unreasonable gains. Control benefits as controlling shareholders control over the cost of compensation, which is a reasonable allocation of the controlling shareholders properly exercise control over access to the new value. And the the ultra control of income to the controlling shareholders through improper exercise control over the allocation of unreasonable force existing value, which will cause damage to the interests of minority shareholders.
(2) benefits of control is a legitimate income, and super-control benefits is not legitimate income. Control benefits is a reasonable cost of compensation, does not infringe on the interests of minority shareholders and the development of the continued existence of the entire company, the legal norms for the protection of small investors will not prohibit the controlling shareholders control benefits. Great facing due to the the ultra control of income unreasonable revenue objective infringe the interests of minority shareholders, banned such acts therefore legal norms to protect small investors, controlling shareholders exercise control in order to get a super control benefits the risk may encounter litigation.
(3) control over the gains can be sustained, and super-control benefits not sustainable. Control benefits is a reasonable return, the objective will not infringe on the interests of minority shareholders at the same time, do not make the whole company to decline. Super control over revenue objective against the interests of the company as a whole, will make the "hollowing out" effect caused the company to recession, and ultimately the disintegration of over-control benefits will eventually disappear.

2 based on the behavior of the controlling shareholders of the benefits of control and super-control benefits analysis

Revenue division of the controlling shareholders to the benefits of control and ultra-control benefits two parts, external investors and the entire company can on this basis in accordance with the behavior of the controlling shareholders essence, the behavior of the controlling shareholders divided into not infringe the interests of the legitimate exercise of the right to control behavior, as well as outside investors and the interests of the entire company would infringe the improper exercise of control over the behavior.
According to the characteristics of the above benefits of control and ultra-control benefits, the criteria for the classification of the two types of behavior can be determined as follows: First, the controlling shareholder of the behavior objectively whether it will cause the entire value of the company's growth. Secondly, the behavior of the controlling shareholders could be sustained. Finally, the controlling shareholder of behavior and even cause the final result is contrary to the relevant legal norms.
Exercise acts of infringement of the interests of minority shareholders by the controlling shareholders in order to get a super control benefits include the following: associated with the purchase and sale of related assets restructuring, cost shifting the burden of the funds used, managed operations, asset leasing, loan guarantees listed companies as well as co-investment, etc., these acts are in line with the above three criteria for the classification: not caused by the growth of the overall value of the company, not sustainable at the same time do not comply with the relevant laws, is the the typical controlling shareholder taken in order to obtain the super control benefits infringement The behavior of the interests of minority shareholders. However, on the basis of clear criteria for the classification of the the division controlling shareholders legitimate behavior and misconduct generally all identified as misconduct can not be identified for the misconduct of the controlling shareholders, have a legitimate exercise of control over the entire course of conduct part. The following is a specific analysis of the two acts of the controlling shareholders.
Behavior: the behavior of non-tradable shareholders throughout the issuance process analysis. Since the non-tradable shares can not be traded in the secondary market, and can only be transferred by agreement price, price agreement generally is based on the net assets per share. The concerns of the non-tradable shareholders of the net assets per share. Issuance of new shares issuance value is much higher than the net assets per share of the accounting book on the company's net assets per share rose sharply after the issuance of the original shareholders of non-tradable shares huge interests of capital appreciation, while at the same time may cause circulation held by the shareholders of the stock price relative downward trend, which considered the largest shareholder with control over the acts of infringement of the interests of minority shareholders. However, according to the above criteria, the issuance of new shares to shareholders of the outstanding shares of the first increase in the value of the company, including accounting carrying amount and the actual capital of the company, the increase in the value of the company's favor companies capture a rare investment opportunity and foreign investors to communicate good investment signals another the issuance of behavior is also sustainable and in line with the law, so it is the proper behavior of the controlling shareholders exercise control. Enterprises are facing a very good investment opportunities and development prospects, the issuance can also lay a solid basis for enterprise development, stock prices may be rising because of the improvement of the social enterprise evaluation. Issuance of this behavior is not bound to harm the interests of the holders of tradable shares, but may have a positive impact on its even the whole company. Therefore behavior of issuing new shares to shareholders of non-tradable shares to date controlling shareholders legitimate exercise control over the behavior.
Subsequently, the major shareholders of non-tradable shares after the reasonable control benefits begin to apply control over Block's commitment to the project after the issuance of funds offering, but for less risk, lower yielding investment in bonds and other financial items The purpose is to ensure the stability of their own wealth. And OTC equity transfer agreement sexual way to honor the appreciation of the value of its net assets per share. Control over such use is no longer a legitimate behavior. Violation of behavior change to raise funds the SFC on improving the quality of listed companies advice on regulating the provisions used by enterprises to raise funds, but also major shareholders of non-tradable shares use of control over the company lost the opportunity for capital appreciation, and forced through kinds of means to honor the value-added benefits, which damage the interests of the entire company as well as small and medium-sized investors, another contract transfer cash value value is unsustainable, with the transfer of non-tradable shares, shareholders' equity, may gradually lose control over. This can be identified improper use of control for controlling shareholders to obtain the behavior of the super-control benefits. Thus, the behavior of the controlling shareholders experienced by the legitimate right to use the control to the improper use of control, gains control of the right to obtain control over the cost of compensation to grab a superset of the violations of the company and the interests of other investors control benefits.
Behavior: non-tradable shareholders in the split share structure reform inject behavior analysis. The major shareholders of non-tradable shares in order to demonstrate the sincerity of the share reform will inject quality assets into the listed company, to increase the company's share price, partially offset by shares transformed into the downward trend of the outstanding shares of stock. In the beginning of the reform of non-tradable shares of major shareholders through the use of its control over the enterprise inject quality assets, can convey the good news to the market, and is conducive to the rise of the corporate share prices and the improvement of the enterprise value. The behavior is the proper behavior of large shareholders to exercise control. The act is conducive to the overall interest of all investors and the company, is also a sustained and reasonable and lawful behavior of investors and market expectations. Proper behavior of non-tradable shareholders. Subsequently split share structure reform and the existence of the lock-up period, the major shareholders of non-tradable shares can not get high-quality assets into the stock price higher the income, the major shareholders of non-tradable shares through related party transactions forcibly for its other companies to provide security super control over income. The behavior seriously infringe on the interests of small investors as well as the entire company, led to the behavior is not sustainable, but also a violation of SFC views on improving the quality of listed companies, "the relevant provisions of the company's interests have been infringed, in line with the standard of judgment of misconduct The major shareholders of non-tradable shares grab through the misuse of control over the behavior of ultra-control benefits. Similarly, in the process, the major shareholders of non-tradable shares also experienced a shift of the ultra-control benefits from improper gains to exercise control over the legitimate exercise of control over the acquisition of control grab. The 3 policy implications
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