Research On Related Party Transactions Of Private Listed Company In The "Pyramid-structured" Ownership

Starting from the protection of the interest of small shareholders, this paper focuses on the connected transaction of those China's private listed companies who have adopted the "pyramid-structured" ownership. As an emerging capital market, China's legal system couldn't provide enough protection for the interest of small shareholders, which leads to a bad situation where a large number of private listed companies with the "pyramid-structured" ownership seek control over their self-interest by way of "hollowing-out" connected transaction, and this bad result dandifies the interest of small shareholders.Studies have shown that, under the "pyramid-structured" ownership, the ultimate controllers with different control power would have two completely different behavior mode--"Union Effect" and "Occupy Effect". And after the description of the basic characteristics of the pyramid structure, this paper studies the proxy confect between the ultimate controller and the small shareholders generated by the separation of ultimate control and ownership, which serves as the main line to analyze the interest-controlling motivation of the ultimate controller at different time. The empirical analysis has been adopted to study what factors are related to the connected transaction of China's private listed companies with the "pyramid-structured" ownership and whether equity division reform is effective to reduce the probability and scale of the connected transactions by the ultimate controllers.Based on the above, this paper could be divided into four parts on the whole. The first part is the First Chapter "Introduction", which clarifies the research questions, refines the research line and explains the research contents and methodology on the basis of a summary of research background and significance. The second part is the Second Chapter and the Third Chapter which based on the systematical study of the basic characteristics of the "pyramid-structured" ownership, set the issue of the proxy between the ultimate controller and the small shareholders as the mainline, designing a simple theoretical model to study the ultimate ownership, the ultimate control and the impact of the separation of the two on the interest-controlling motivation of the ultimate controller, this part, from the perspective of theory and experience, analyzes the possible scope between the two sides for the "Occupy Effect" -- when the bilateral benefit conflicts and the "Union Effect"--when the bilateral benefit converges. The third part is the Fourth Chapter which conducts an empirical study of the factors affecting the probability and scope of connected transactions, analyses the "hollowing-out" behavior in the connected transactions with 320 Shenzhen private listed companies with "pyramid-structured" ownership from 2006 to 2010 as a sample, and analyses the effective equity division reform to reduce the probability and scale of the connected transactions by comparing the conditions before and after the reform.. The fourth part is the Fifth Chapter, which summarizes and extracts the conclusion of the research, puts forward some suggestions to protect the interest of the small shareholders in private listed companies.