A Study Of Controlling Shareholders Expropriation Small Shareholders' Interest In Chinese Listed Companies

Capital market has rapidly developed in the last over one hundred years and had glory achievements.But at the same time,that controlling shareholders expropriate small shareholders' interest has been a wide existing phenomena.The results of substantial empirical studies show that the degrees of controlling shareholders' expropriation in the developing counties is more serious than that in mature capital markets,such as US and Great British.The way how the controlling shareholders expropriate small shareholders' interest were very complicated,such as related party transactions,dilutive share issues,embezzle listed company's funds.All theses cases seriously injure investment confidence and investment enthusiasm of small shareholders,therefore,it is extremely urgent to strengthen the protection of small shareholders' interest and safeguard sound development of the securities market.This paper systematically analyzes the form,means,danger,reasons of controlling shareholders expropriate small shareholders' interest.The conclusion of this paper shows that because of the existence sole state shareholders,which finally result controlling shareholders' expropriation more serious.Therefore,we must improve various internal and external corporate governance mechanisms and establish legal institution,so as to regulate controlling shareholders' behaviors and protect the interest of small shareholders.This paper confirmed the facts that controlling shareholders' expropriation exist in the process of allotment of shares in Chinese listed corporations.In the process of allotment of shares,the phenomenon of allotment at high premium prices,controlling shareholders abandon of allotment or declination of future yields widely exist.We analyzed the above phenomenon and compared different preference of different share structure companies,to reveal the potential conflict of interest between controlling and small shareholders during the process of raising funds.The empirical research results show that the expropriation of small shareholders became the major object other than improving the future achievements.Chinese listed companies have a high concentration share structure,which, though after the reformation of non-circulation share,is still greatly higher than that of the other matured capital markets.Therefore,a coordination mechanism including micro and macro interests should be established which also require a regulative financing environment.An integrate system of state assets management which has a clear share structure is a premise to Chinese capital market.And an integrate legal system is crucial to protect the small shareholders' interest.