Major Shareholder Of The Causes Of The Predatory Behavior Of Listed Companies In China And Countermeasures

The Chinese economy is undergoing profound changes nowadays.At such a sensitive stage, the profits of small and medium-sizedshareholder are appropriated by large ones due to the loophole of legalprotection for investors, which plagues the newly born Chinese securitymarket. Through illicit means such as self-dealing transaction, adjustingdividend policy, handling stock price, changing fund-raising use, thegigantic shareholders appropriate the dividend of small and medium-sizedones. Consequently, such practices have jeopardized the sounddevelopment of China's listed companies and the security market as awhole.This paper has especially analyzed the problem of expropriation bylarge shareholders of public corporations on small investors and how tosettle the problem in China. We find the reason why large shareholderexpropriate on small shareholders with qualitative analysis on thesecurities market orientation of our country, ownership structure,corporate governance, portfolio supervision and investor legal protection,then we setup mathematic model with quantitative analysis. On the basisof the model we put forward below measures to restrain expropriation bylarge shareholders. Firstly, we optimize the ownership; reduce theproportion of the state-owned structure stock. We should fosterinstitutional investors actively, form the stock right structure that several large shareholders coexist, can take shape and restrain large shareholder'sbehavior. Secondly, improve corporate governance which focuses onperfecting the function of the board of directors, building manager'smarket and company control power market. Thirdly, strengthen thesupervision of the supervision department of security market. Lastly,strengthen the legal protection to minority stock holder from legislation,the administration of justice and enforcing the law.