Research On The Tunneling Behavior Of Shareholders In Listed Companies Without Ultimate Controlling Owner

The previous literature shows that due to the inconsistency of interests with the small and medium shareholders,the controlling shareholders have the motivation to grab more benefits for themselves through methods such as hollowing out.Such self-interested behavior will harm the interests of minority shareholders.The above phenomenon is regarded as the type II agency problem,and it is also regarded as the main contradiction in the corporate governance of listed companies under the characteristics of high concentration of equity in China’s capital market.Therefore,previous studies generally believe that the mechanism to alleviate the type II agency problem should be to imitate the mature capital market such as the United States to diversify the equity of major shareholders,and form a balance of equity structure.With the development of China’s capital market,some listed companies have appeared without ultimate controlling owner: In 2008,there were 31 Shanghai and Shenzhen A-share listed companies without ultimate controlling owner,accounting for 1.94% of all A-share listed companies;as of 2019,The number of Shanghai and Shenzhen A-share listed companies without ultimate controlling owner has increased to 244,accounting for 6.4% of all A-share listed companies.So,will these listed companies without ultimate controlling owner really form a situation of mutual checks and balances among major shareholders,thereby alleviating the type II agency problem?Based on the review of the existing literature,this paper uses the rent dissipation hypothesis of property rights theory as the basic theory for theoretical analysis,according to the results of statistical tests on the data of A-share listed companies from 2008 to 2018.The research shows that: Listed companies with ultimate controlling owner,and listed companies without ultimate controlling owner,have instead presented a more serious problem of major shareholders’ equity pledges.In order to further reveal the internal mechanism of the problem,this article chooses the listed company Jiaozuo Wanfang as a typical case study object,which has been in a state of no ultimate controlling owner since 2013.This article finds that many temporary major shareholders of Jiaozuo Wanfang have not obtained the control of the company,and it is difficult to restrain and motivate the management,resulting in unsatisfactory company performance.On the contrary,the company’s multiple major shareholders each carried out frequent equity pledges based on their interests,which further led to a long-term downturn in the company’s stock price.Based on the above analysis,this article believes that without ultimate controlling owner,due to unclear property rights,multiple large shareholders are more likely to aggravate listed companies for their own interests,worsen the type II agency problem,and cause even more damage to the interests of small and medium shareholders.The possible contribution of this article is: theoretically,there is a common controlling shareholder in listed companies in emerging capital markets.Previous studies have shown that the interests of large shareholders and small and medium shareholders are inconsistent,which will cause large shareholders to encroach on the interests of small and medium shareholders.This is the type II agency problem,based on a large amount of empirical evidence in China’s capital market also supports this theory Inference.Therefore,the type II agency problem is considered to be the main principal-agent problem in China’s capital market.Correspondingly,it is believed that the non-diversification of equity in China’s capital market is the cause of the type II agency problem.The empirical evidence in this article shows that even if the controlling shareholder loses control and the company has no ultimate controlling owner,the type II agency problem still exists after the shareholding is diversified,and multiple major shareholders will still base their own interests on the basis of their own interests.The continuous equity pledge method grabs their own interests and harms the interests of small and medium shareholders.Based on this,diversification of equity may not be the key to solving the type II agency problem.In reality,as China’s capital market matures,the ultimate controlling owner of listed companies will gradually withdraw due to equity dilution or mixed ownership reforms.More and more listed companies without ultimate controlling owner will appear.The corporate governance of this type of listed company urgently needs our investigation and thinking.The empirical evidence in this article shows that at this stage,the existence of multiple large shareholders cannot alleviate the type II agency problem.On the contrary,the interests of multiple large shareholders are inconsistent and the property rights of the enterprise are not clear,which further harms the interests of minority shareholders.