The Game Balance Analysis Between Controlling Shareholders And Minority Shareholders

There is a large number of related-party transactions in China's listed companies which is uncommon in the other world stock markets. See through the complex appearance of related-party transactions, we can see that the essence of it lie in the conflict of interest between the controlling shareholders and the minority shareholders. This paper tries to acquire the game balance between the controlling shareholders and the minority shareholders in Chinese stock market through the study of unfair related-party transactions. The amount of the related-transactions becomes more year by year. China's listed companies have a special ownership structure with obvious Chinese characteristics including the state-owned shares Accounted for the largest shares, closely linked with the group company, the absence of the real owner, and in internal control as well. This is determined by China's special national conditions and the historical mission of the stock market. There is a controlling shareholder in most of the listed companies who controls the company and had the power to act for his own sake. The listed companies often carry out transactions with the controlling shareholder's group company. The listed companies depend a lot on the group company with a low ability to operate independently. This is a serious problem with the healthy development of listed companies. Some controlling shareholders use the listed company as a tool for financing, seriously infringing upon the interests of the minority shareholders.The article then establishes game models to analyze the game balance between the controlling shareholder and the minority shareholder through the study of unfair related-party transactions. In this paper, Pigs game model is used to analyze the free-rider behavior of the minority shareholders in corporate governance. The article establishes a complete information static game model between the controlling shareholder and the minority shareholder with respect to the act of unfair related- transactions. This article is also create a game model to analyze the balance between the controlling shareholder and regulatory authorities.The last is the suggestions, including strengthening the information disclosure of listed companies and increase of the punishment of unfair related-transactions.