Research On Governance Of Corporate Related Party Transaction Violations

With the rapid development of the capital market,violations of related party transactions have become more frequently.According to statistics from the China Securities Regulatory Commission on punishment cases from 2009 to 2018,there were more than 30 companies that were punished for non-fair related party transactions.Among the illegal companies punished from 2015 to 2018,60% of the companies involved in financial fraud using unfair related party transactions are represented by events such as “Green Earth” and“ZIXIN Pharmaceutical”.With the expansion of corporate business scale,related party transactions between the group and listed companies have become more complicated,and the transparency of capital flows has been greatly reduced.The current internal control of related party transactions adopted by listed companies,the distribution of control rights and equity between listed companies and the group,There are also a series of loopholes.Therefore,in practice,a set of internal control and external supervision system of related party transactions based on effective control and equity allocation of the group and the listed company can not only effectively promote the healthy development of the enterprise,but also help the market create a healthier atmosphere for related party transactions.This article selects the case analysis method as the research method,and selects KDX as the case object to study the illegal behavior of related party transactions.Firstly,the development background and related conceptual theories of related party transactions in the current capital market are introduced,including the concepts of related party transactions,control rights theory,information asymmetry theory,principal-agent theory,and laws and regulations on transaction violations and disclosure violations.Secondly,according to the audit annual report data released by KDX and competitors in the industry,analyze the specific methods of illegal transactions of KDX’s related party transactions,including the false increase in profits of related party transactions,non-operating capital occupation of related subsidiaries,and failure to disclose in time Four aspects of related party guarantees and concealment of related party relationships.Thirdly,the relevant financial indicators of KDX and JZ Technology are compared,and the causes of KDX’s internal control,major shareholder hollowing out,and external supervision system are analyzed.Finally,combined with the study of the above three causes of KDX,this paper proposes three multi-layer governance mechanisms based on the theory of control rights and the theory of information asymmetry: First,when the business scale of the enterprise and the volume of related parties expand,the design of multiple Hierarchical related party transaction approval mechanism to ensure the independence of the company’s internal audit committee and the board of supervisors;second,when the group and the listed company have uneven control and equity allocation,optimize the company’s equity structure and establish a risk early warning of related party transactions Indicators to reduce internal regulatory loopholes in corporate related party transaction violations;the third is to strengthen external accounting firms’ risk prevention and control and risk assessment capabilities of related party transaction violations,including:(1)Improve the internal control system of accounting firms(2)Establish a three-level review system;(3)Improve the professional and personal qualities of auditors.Strengthen external supervision and improve the external supervision mechanism.