Under The Background Of Full Circulation Numbers Are Large Shareholders Of Listed Companies

Chinese capital market is not only in the phase of economic transition,but also ina stage of highlighting contradiction,in other words, Chinese capital market is stillimmature. Securities market’s improvements and promotions are pushing forward thedevelopment of national economy. It is playing an active role in the developmentChinese economic.However,because the institutional background and other factors,there are still a lot of disharmonious factors in Chinese capital market, these factorshas seriously hampered the development of capital markets. For example, the themeof this study is the problem of the largest shareholder of listed companies occupyingfunds. It is a "cancer" long-term existence on the capital market, it seriouslyimpediment the healthy development of capital markets. If the problem of largestshareholder of listed companies occupying funds remains unresolved, the middle andsmall shareholders’ interests can not protected well. If investors lost confidence, it willaffect the exertion of the function and efficiency of capital markets. Previous studiesare in the background of the split share structure, with control premium as the startingpoint that Chinese listed companies exist large control premium. It damages theinterests of small shareholders. This article is in a new background that is circulation.This study will take some listed companies in Shanghai Stock Exchange or inShenzhen Securities Exchange for example from the rate of occupying funds of largeshareholder to reveal large shareholders’ occupying funds seriousness of the problem,which put forward the interests of small shareholders in need of protection.With the continuous advance of the split share structure reform, Chinese capitalmarket gradually entered circulation times. That is to say, Chinese capital marketgradually deals with different interests because of split situation of circle shares andnon-circle shares. November 8, 2010, with the lifting of the ban of 1579.22 hundredmillion restricted shares, the circle market capitalization of Shanghai stock market andShenzhen stock market nearly 80% of the total market value, declaring the Shanghaiand Shenzhen stock market has officially entered into circulation times. Circulationtimes of arrival plays a "downer" to imperfect capital markets. Non-circleshareholders pay a certain price to get the circulation right. Therefore, the arrival ofcirculation will gradually solve all the disadvantages of the split share structure. Thesituation of the largest shareholder encroaches the middle and small shareholders’interests by misappropriation and other direct occupation will alleviated. However,the share reform is long-term, arduous system engineering; the current capital market has just the basic realization of circulation, the share reform needed to further advance,due to the dominance of the situation in the ownership structure of listed companies inChina is not alleviated. There is a serious phenomenon of "internal control" in listedcompanies. Large shareholders encroach minority shareholders’ interest by moresecret or indirect occupation. In recent years, the capital markets continue to burstmisappropriate or illegal occupation of large sums of money. This will let the listedcompanies fall in financial trouble. Some listed companies which seemingly operatingin good condition are facing suspension and the risk of delisting. This has seriouslyshaken the confidence of small investors and will not conducive to the effectiveoperation of capital markets. Therefore, under the background of circulation and theperspective of the protection of the interests of shareholders, by analyzing largeShareholders of forms, processes, the formation mechanism and hazards of occupyingfunds to reveal the seriousness of occupying funds. Then put forward effectivecountermeasures and suggestions to the solution of occupying funds and raising thelevel of the interests of minority shareholders protection.On the basis of existing research, this artic uses Chinese listed companies asresearch, combined with the circulation background and from the perspective ofprotection of the interests of shareholders to study large Shareholders of behavior. Intheory, on the basis of the relevant theory, analyze the heterogeneity of the largeshareholder and minority shareholders’ interests before and after the circulationbackground and found there is no fundamental change in shareholders’ profittendencies. It is because that the motivation of seeking benefits of the largeshareholders unchanged. By analysis of large shareholders on the basis of paragraphmode, this paper discusses the causes and hazards of the big shareholders. In theempirical research part, I will analyze the existence and dangers of the bigshareholders by the number of point of view. The empirical analysis is mainlyselected base on the year of 2002 to 2010,the existence of large shareholdersoccupying funds in listed companies in Shanghai and Shenzhen Stock Exchange forthe research sample, after excluding missing samples, a total of 4751 samples. Thisarticle will from three respects of ownership structure, equity liquidity and companysize by Eviews3.1 software. The empirical analysis first build a simple regressionmodel to study the impact of the ownership structure of large shareholders, from theperspective of the largest shareholding ratio and the second largest to tenth largestshareholder stake. As the level of the largest proportion of shareholding and equity division reform might be the impact of big shareholders of behavior, this article willbe the largest shareholder of the proportion of 50% and implementation of the splitshare structure reform in 2005 as a dividing point segmentation study. On the basis ofsimple regression analysis, by constructing multiple regression analysis, the studyfrom the equity liquidity, ownership structure and company size in three aspects. Byt-test on the regression results based on the following conclusions: first, there is aserious problem in Chinese listed companies that’s occupying fund. second,occupying fund. is in the proportion of inverted U-section with the largest shareholderrelationship in Chinese listed companies; third, the more obvious effects in checksand balances between shareholders, the more big shareholders of behavior will also beable to be controlled; fourth the implementation of the split share structure reformprovided a favorable policy environment for the solution of the big shareholders; fifththe nature of large shareholders equity affects the behavior of big shareholders.Finally, on the basis of theoretical analysis and empirical findings, combinedwith the actual situation of Chinese specific national conditions and capital markets,then point some corresponding recommendations: first, establish checks and balanceson the power of the largest shareholder and improve corporate governance structure;second, improve the relevant laws and regulations and increase the cost of illegal;third, strengthen information disclosure, and increase the punishment for falseinformation disclosure and regulatory; fourth, increase the compensation mechanismof the controlling shareholder.