A Case Study On The Expropriation Of The Controlling Shareholders Of Guangxi Mingli Innovation Industrial Co.,Ltd.

Since the formation of my country’s capital market,the behavior of controlling shareholder’s interest has always existed.In order to effectively alleviate the expropriation of company interests by controlling shareholders,the relevant regulatory authorities in my country have already adopted a series of rectification measures.However,for companies with relatively concentrated equity and the controlling shareholders have absolute right to speak,the expropriation has been repeatedly prohibited.Therefore,the in-depth study of the controlling shareholder’s interest embezzlement,analysis of its causes,methods and consequences,and constructive suggestions and enlightenment,can effectively curb the controlling shareholder’s interest embezzlement,and have a significant impact on the sustainable and healthy development of the capital market.Realistic meaning.This article selects Guangxi Mingli Innovation Industrial Co.,Ltd.(hereinafter referred to as "Mingli ")as the case company to study the case of the expropriation of Mingli’s controlling shareholders.Mingli is a phosphorous chemical company that was listed on the NEEQ on February 16,2015.Since then,Mingli has been active in trading volume and once became one of the star companies on the NEEQ.However,the good times did not last long.Mingli received regulatory letters issued by the China Securities Regulatory Commission in 2016 and 2017.In addition,Mingli was issued with disclaimer of opinion during the three years from 2016 to2018.In January 2020,Mingli received an administrative penalty decision issued by the China Securities Regulatory Commission due to false records and major omissions in information disclosure,and trading will be suspended on May 6,2020.This article sorts out the process of the controlling shareholder’s expropriation by sorting out the public information disclosed by the company such as annual reports and announcements.On this basis,it specifically analyzes the causes,means and economic consequences of the controlling shareholder’s expropriation.The results found that the controlling shareholder also discussed the case enlightenment brought about by the controlling shareholder’s interest embezzlement behavior.Defects in the company’s internal governance,a virtual internal control system,frequent equity pledges intensified the separation of the two rights,coupled with inadequate information disclosure standards for small and medium-sized enterprises on the NEEQ and inadequate external supervision,have all led to expropriation of controlling shareholders to a certain extent.From the point of view of the means of encroaching on the interests of controlling shareholders,controlling shareholders conceal their affiliated relationships to realize false transactions,provide illegal guarantees to affiliated parties,and transfer funds through acquisitions.Finally,the article puts forward feasible countermeasures: strengthening the company’s internal control management,improving the company’s internal governance mechanism,strengthening the information disclosure norms,and strengthening the supervision and accountability of intermediary agencies.