An Empirical Analysis Of Large Shareholders Expropriation Based On Private Benefits Of Control

With the further concentration of ownership, corporate governance has been ashift in agency relationship from the owners and operators to the small shareholdersand major shareholders. This paper selects 125 samples through transactionagreement from the year 2003 to 2005 in china's A-share market. From theperspective of private benefits of control, this paper has indirect measurement aboutlarge shareholders expropriate the interests of minority shareholders. And, this paperhas come to the preliminary conclusion through regression analysis of the factorsaffecting private benefits of control. The private benefits of control is about 2.6%accounting for the company's net assets. It reflects the large shareholders expropriatethe interests of minority shareholders. Transfer ratio, cash and short-term investmentsand income level are related to private gain control benefits. The companies holdmore cash and short-term investments, the more easily the largest shareholder invadedthe interests of minority shareholders. ROE, the proportion of shares in circulation,the size of the firm and financial leverage have a negative correlation. First, in orderto maintain the healthy development of China's capital market, this shows that thegovernment should further improve the legal system, the ownership structure, adiversified investment system and the establishment of property rights mechanism ofchecks. The government should protect the rights and interests of investors too.Second, make a better play to the supervisory role of external circulating shares, andfurther improve the system of governance creditors, allow creditors to effectivelyoversee the company's operations. Meanwhile, the regulatory authority for listedcompanies should strengthen the supervision and management of the dividend policyto encourage listed companies dividends guard against "a smaller share of highticket".