Case Study On Identification And Prevention Of Tunneling Behavior Of Controlling Shareholder In Dongfang Jinyu

In recent years,the vicious events of major shareholders tunneling listed companies have emerged in endlessly and intensified.This behavior not only seriously damaged the interests of minority shareholders,but also caused great trouble to the capital market.Therefore,how to identify the tunneling behavior trend of big shareholders,to perfect the internal and external governance to inhibit the tunneling conduct of major shareholders and promote the self-protection consciousness of minority shareholders has become an essential complication to be fixed.This thesis studies the tunneling case of Dongfang Jinyu,a listed company,by using the methods of literature research and case study.It is found that the main means of tunneling by major shareholders of Dongfang Jinyu are related party transactions,capital occupation,stock price manipulation and excess cash distribution.This thesis analyzes the motivation of the tunneling of Dongfang Jinyu’s major shareholders,and summarizes that small and medium-sized investors can find the trend of the tunneling of listed companies by major shareholders from the following points as identification signals: first,the family business is dominated by one share,and the actual controller concurrently serves as the president.At the same time,the high proportion of pledge by major shareholders and the extended negative cash flow of operating activities of Dongfang Jinyu will force the actual controller to transfer assets,whether it is capital demand or pessimism about the company for the reason.Second,the inventory jadeite is a non-standard asset,which is difficult to evaluate,giving the actual controller the opportunity to implement tunneling.Third,the unstable performance growth of Dongfang Jinyu,the varying degrees of confusion and implicit correlation between suppliers and customers,and other receivables abnormalities reflect the financial and non-financial performance of the listed company tunneled by the controlling shareholder.Finally,based on the results of the case study of Dongfang Jinyu,a jewelry listed company,this thesis puts forward suggestions from the aspects of minority shareholders,legal system and supervision.The upshot of this thesis not only enrich the theory on the recognition and control of tunneling,but also present reference for listed companies,minority shareholders and regulatory authorities on how to prevent the controlling shareholder tunneling.