Research On Major Shareholders’ Stock Reduction And Information Disclosure Management

Since the split share structure reform,major shareholders have begun to trade company stocks on the secondary market frequently.In the process of reducing its holdings,irregular behaviors have emerged endlessly,which has drawn more and more attention from market participants.Information disclosure in the process of reducing holdings has become the focus of supervision.In order to obtain a higher reduction in holdings,major shareholders with information advantages will gain market attention by influencing information disclosure to raise the company’s stock price.The main ways of information disclosure management are earnings management and selective information disclosure,which are usually characterized by a high degree of concealment and are difficult to be identified by investors in the market beforehand.Therefore,the information disclosure management behavior in the process of major shareholder reduction not only affects the quality of accounting information,but also causes investors to a certain degree of misleading,resulting in different degrees of economic losses,which is not conducive to the healthy development of China’s capital market.In this article,the Wang Piaoyang family,the controlling shareholder of the company Wanbangda,reduced its holdings when the company’s stock price reached an all-time high in 2015.The reduction amount was as high as 6 billion,which was the largest amount in that year.Observing the information disclosure of the company before the reduction,it was found that before the reduction,the company frequently announced favorable performance,major contracts,issued "high delivery" programs,and cooperated with securities firms to issue research reports.In view of the company’s stock price trend,these announcements have a strong seditious effect,attracting investors to buy,and the company’s stock price has also trended higher.Based on this phenomenon,this article takes Wanbangda as the research object,based on the relevant literature and theoretical research of major shareholder reduction and information disclosure management,and uses case study method and event research method to conduct specific analysis on the information disclosure management of its major shareholders.This paper finds that:(1)There are various information disclosure management behaviors in the process of Wanbangda’s maj or shareholder reduction,including the use of earnings management to whitewash statements,frequent release of good news through selective information disclosure,and cooperation with securities firms to raise stock prices and attract retail investors to enter,and even jointly with private equity to manipulate stock prices.(2)The economic consequences of the reduction of holdings by major shareholders are the decline in the company’s operating capacity,profitability and growth ability,and the interests of small and medium shareholders are harmed.Finally,in view of the irregularity of the major shareholders’ reductions in this case,this article puts forward suggestions on corporate governance and disclosure of reductions in information and the supervision of profit distribution.