Study On Violations Of Large Shareholders After The Reform Of Share Splitting

Reform of share splitting is a major system-breakthrough in China's securities market. It overcomes pre-existing defects in China's securities market as same shares have different rights, importing energy into the development of the securities market. For example, reform of share splitting makes abuses, on which large shareholders practices violation, weakened greatly, contributing to the improvement of corporate governance.Meanwhile, reform of share splitting does not eliminate market's ills immediately. For example, China's stock market it still exists conflict between the large shareholders and small shareholders in China's stock. Although reform of share splitting reduced confrontation and conflict of the interests between the large shareholders and other shareholders to a certain degree, it does not make substantive change in the ownership structure of listed companies. The irrational original structure of shares can not be changed radically in a relatively short period. Violations of large shareholders will still exist and may change to uncommon form, leading to more serious consequences. Therefore, it is of great era significance undoubtedly that we make a reasonable forecast and preventive measures to the violations of large shareholders.On the first part, we introduce the concept of corporate governance theory, also its development and application in China. Secondly, we clarify some relevant concepts and make simple description on existing of large shareholders in China's capital market, to lay the foundation for further analysis. Thirdly, we discuss the utility function of large shareholders after the reform of share splitting and explain the motivation violations, getting an opinion that it remains incentives to do violations of large shareholders after the reform of share splitting. In the Part four, we study the research on price manipulation from Western scholars and use mathematical deduction to analysis the large shareholders' impulse to manipulate stock prices, preliminary studying the impact of new factors on the large shareholders' violations—price manipulation. Than we use the game in the fifth part to get the opinion: the Nash equilibrium is that large shareholders and institutional investors do conspiracy practices with corporation after the reform of share splitting, preliminary studying the important means of the large shareholders' violations - corporation with the institutional investors. In the Part six, we make the regression analysis between the stock proportion hold by large shareholders and the capital ratio of main operation on 2006 to confirm the possible results brighten by large shareholders after the reform of share splitting. Finally we make conclusions and relevant policy recommendations.