Price Discount of Private Equity Placement and Interests Transferring Subscripted by Larger Shareholders in China

We examine the effects o subscription behavior and wealth transferring controlled by larger shareholders on price discount of private placement. Price discount of private placement and wealth transferring effect exhibits a significant trend when larger shareholders subscribe more private placement shares. Shares proportion subscribed by larger shareholders, shares size of private placement and total assets size are positively related with price discount of private placement at the 5% confidence level, Interests transferring and share-holding increase before and after private placement are positively related with price discount of private placement at the 10% significance level, larger shareholders have strong incentive to transfer wealth from medium-small shareholders. Key-Words: private placement; price discount; larger shareholders; interests transferring;