Discussion About Interest Invading By Major Shareholders Of Private Listed Companies Under Pyramidal Ownership Structure And The Corresponding Countermeasures

That the major shareholders invade the interests of minor shareholders under the pyramid shareholding structure has become a hot topic being discussed by the theoretical and practical field. Firstly, this article systemically reviews the foreign and domestic researches on pyramid shareholding structure and its characteristics, the choice between pyramid shareholding structure and level shareholding structure, interests invading behavior of ultimate controlling shareholders and the impact of interest invasion on firm value. Secondly, the paper analyzes the present conditions of pyramid shareholding structure of private listed companies, finds that most of private listed companies use the pyramid shareholding structure, and the ownership and control right separate in a high degree. In the third place, the paper analyzes the interests invading manifestations and the influence of interests invading on listed companies. On this basis, the paper analyzes the deeper reason of interests invading from several aspect such as the composition of the executive board and the management, the independent director system, the disclosure of information system, supervision and the fact that small shareholders participation in decision-making does not work on China's securities market. Finally, in order to improve the governance structure of listed companies in China under pyramid shareholding structure, the author proposes to strengthen to verify People who have concerted action with the major shareholders, improve the independent director system, establish special affiliated transaction committees, track financial status of listed companies, strengthen to supervise the behavior of major shareholders, improve the quality of information disclosure, and strengthen legal protection of medium-sized shareholders' interests.