Research On The Behavior Of Interest Embezzlement Of Major Shareholders Of Saf Bon Water Affairs And Its Prevention

With the rapid development of the economy,the development speed of Chinese companies is also getting faster and faster.At the same time,the number of transactions on the Shanghai and Shenzhen stock exchanges is also increasing.Although the rapid development of the stock market has promoted China’s economic development,it is also easy to encounter some problems,such as the encroachment of major shareholders’ interests.The infringement of the interests of major shareholders has harmed the interests of listed companies and small and medium-sized shareholders.How to effectively suppress and reduce the occurrence of infringement of the interests of major shareholders in listed companies in China is currently an urgent problem to be solved.This paper takes the interest encroachment incident of Saf Bon Water Affairs as a case,uses the principal-agent theory,information asymmetry theory and the theory of control right income,combines the methods of comparative analysis,event study and Z-score model,and starts from the specific means of the interest encroachment case of major shareholders,analyzes the reasons and economic consequences of the successful implementation of interest encroachment by major shareholders of Saf Bon Water Affairs,and establishes a prevention system,And propose preventive measures from both internal and external perspectives.Through the analysis of this article,the major shareholders of Saf Bon Water mainly encroach on the listed company’s interests through illegal guarantees,related party transactions,and non operational fund occupation.After analysis,it is concluded that the unreasonable equity structure of Saf Bon Water is a prerequisite for the major shareholder’s interest encroachment behavior,and the defects in internal governance create opportunities for interest encroachment behavior.Third party audit supervision is not in place,The insufficient legal supervision and punishment have led to the intensification of interest infringement behavior.On the one hand,the encroachment of major shareholders’ interests has led to a deterioration of the production,operation,and financial situation of listed companies,resulting in a serious financial crisis.On the other hand,the sharp decline in stock prices and earnings per share has brought great losses to small and medium-sized shareholders,and has also affected the healthy development of the capital market.Secondly,in response to the encroachment of major shareholders’ interests,this article establishes a prevention system for interest encroachment,and proposes suggestions from introducing institutional investors to achieve equity balance,improving internal controls,ully disclosing relevant information,and increasing regulatory efforts.It is hoped that this can bring some inspiration to similar listed companies and small and medium-sized investors.