The debate on the prohibition and release of gambling on PE

Securities Times reporter Yang Dong "To gamble" a word, at first glance, implied by the parties involved in complex and purposeful transactions, it is likely that the interests of third parties to wager chips, so in this context, the word "gambling" is a gray, negative, should be prohibited. In fact, in the capital market, similar "to gamble" behavior in many cases can protect the interests of both sides of the transaction, and can bring to the third party (shareholders) additional benefits.　　As a share-splitting reform began in 2004, payment to the price agreement arrangement (such as the commitment of the corporate shareholder to the circulating shareholder to pursue the shares) is one of the effective means to solve the equity reform; again, as listed companies or mergers and acquisitions reorganization, performance Commitment agreement arrangement is to promote the performance growth of listed companies must not. Nowadays, with the quickening of the development of the gem, it has become one of the important supervision objectives to keep the performance and stability of the gem listed companies.　　In this case, because most of the gem companies have PE shareholders figure, PE to the gambling agreement on the listed companies and the stability of the impact of the performance of the regulatory layer of strict supervision. In this environment, PE on the gambling agreement should be cleaned up. Taking PE equity's anti dilution clause as an example, it is the measures taken by PE to prevent the target company from being diluted in the process of subsequent issuance or financing.　　If the target company in the issuance of additional requirements to obtain the priority of the subscription, or when their own shares have been diluted to require the target company to give cash or equity compensation.　　And the performance of gambling as an example, refers to PE for the target company set a performance growth goal, if completed will give the target company management team cash or equity incentives, otherwise the target company to give equity or cash compensation. At present, the corporate governance structure of gem listed company still needs to be perfected, these two kinds of gambling agreements are very easy to damage the interests of the third party, that is, the majority of small and medium-sized shareholders, such as shareholders have no reason for the target company performance against gambling failure to take their own shareholders ' rights and interests, and may easily lead to large fluctuations in the performance of listed companies or accumulated business　　, such as listed companies to complete the performance of the gambling target, may violate the false financial statements and other acts. However, from overseas mature market experience, PE gambling behavior is regarded as a normal agreement, is allowed. As for the overseas market case of "three wins" between the two sides and the third party, domestic investors are most familiar with the performance and equity betting agreements between Morgan Stanley and Mengniu Dairy.　　The actual operation, Mengniu, Morgan Stanley and investors have achieved a total win: Mengniu to achieve a number of consecutive years of high-speed performance growth, the executive team has won the shares of Morgan Stanley awards, Morgan Stanley's option value to be fully honoured, investors are enjoying the rapid development of Mengniu high dividend returns. At present, China's venture capital market presents the characteristics of "more money, less good project", so the high quality target company's investment price is more expensive, PE to invest often bear huge risks. At this point, PE to the gambling agreement as a means of safeguarding their own interests and natural appearance, and even the PE institutions adhere to the implementation of "noThe policy of not voting on the gambling agreement. In this kind of PE to the gambling agreement popular present, in addition to the "PE on the gambling agreement" set up the restricted area, when the time is ripe, may consider the specific content of the PE to the gambling agreement of the "instability" degree, for some can achieve "three win" to the gambling agreement or arrangements to support, This will help to maintain the overall vitality of the gem and even the SME board.