The Research Of Deprived Governance Under Pyramid Equity Structure Of Listed Companies In China

Currently with Chinese securities and the development of capital market, the listed company becomes the only road of the multitudinous enterprise development and expansion. But in these listed companies, often have the actual controller through controlling chain to realize its control gain, and deprived the interests of small and medium shareholders, at last make the listed company of "ultimate control" pocket. This phenomenon exists generally and it links with the listed ownership structure in our country. This article is based on the deprivation of listed companies in China and selected two representative cases, then analyzes the two cases of corporate governance problems behind the listed companies in China, and revealed widespread pyramid ownership structure and the ultimate controller deprivation of governance structure. Through this paper, it can provide valuable reference for such type of corporate governance problems.First, looking back to the related theory and the interpretation of the corporate governance structure, this paper explains the concept of ownership structure and the pyramid shareholder structure in the domestic and foreign research results. The type of deprived governance structure usually consists of chain, pyramid and cross-shareholdings. This article introduces the deprivation behavior of controlling shareholders under the pyramid ownership structure. The salient features of the management system of east Asia is the interests conflict between the small shareholders and the ultimate owner enterprise group members of the enterprise as a whole enterprise group the controlling shareholder. While in China, under the planning economic system of long-standing only big state-owned structure, according to path dependence theory ingrained, the high concentration of ownership will definitely affect existing ownership structure and governance mode. What's more, Chinese capital market is not well developed, and restriction of equity trading and market financing of listed companies, through the pyramid structure it exists the phenomenon of big shareholders with ultimate control power to get benefit. Secondly, by collecting and sorting listed company information related to the listed companies in China, describes the current situation of the deprivation corporate governance structure, and shows the deprivation characteristics and expression of controlling shareholders. Equity structure of listed companies have three main features:Firstly, the equity division:the non-tradable shares coexist with the tradable shares; Secondly, including 60% of total shares is non-tradable shares, meanwhile the absolute majority of non-tradable shares are country and legal person shares; thirdly, the first largest shareholders in a listed company on average have more than 40% share ratio, become controlling shareholders, and have significant ownership concentration characteristics. In the country and legal person share there is a direct holding in the big shareholders. And for controlling shareholder, the first largest shareholder will be basically through the connection transaction, dividend policy, management arrangements to gain control and over-borrowed self-interest.Thirdly, this article from the viewpoint of system, environment and the controlling shareholders motivation, deeply explains the reason and influence of pyramid shareholder structure in our country. Because of our country's high concentration of ownership structure, as well as the reform process of path dependence effect, it determines the system foundation of forming the ultimate controlling shareholder in Chinese enterprises. In addition, imperfections of China capital market, lack of related laws and regulations, provide environment foundation of equity pyramid structure. And for controlling shareholders, through the pyramid structure, on one hand they can improve the corporate performance supervision and management, and enhance the overall shareholder interests; On the other hand big shareholders use control advantage to deprive the interests of minority shareholders to realize their selfish. This behavior will seriously damage enterprise value (Holderness Sheehan,2000). It means that the deprived structure can bring about incentive and cooperation effect, also can lead to the controlling shareholder occupy pattern. At the same time, from point of the listed company and the interests of small and medium shareholders, analyze the influence of enterprise under the pyramid deprive type structure of listed companies.Finally, this article selects wuliangyie and jiangsu sunshine which are two typical cases in detail analytical. According to the characteristics of state-owned enterprises and private enterprise in China, reveal its deprivation behavior performance and the influence of the listed companies. On the basis of the above analysis, it puts forward the relevant strategies and suggestions, including state-owned equity structure optimization, such as reducing country shares, introduce institutional investors, improve listed company supervision disclosure system, increase transparency in listed companies, and finally strengthen the related laws and regulations, and protect the interests of small and medium shareholders.