Recognition And Analysis Of Tunneling Base On Related Patry Transaction

In the year of2011, by the ginseng concept, with amazing performance of JiLinZiXin Pharmaceutical has been exposed for selling and purchase all by oneself, theshareholders called it second YinGuangxia, however, when the Yin Guangxia eventhas been past more than ten years, China’s shares industry securities has beencomprehensive improved and developed，the regulatory regime has been graduallyestablisd, behavior of ZiXin Pharmaceutical could not help made us rethinking.In the era of post-financial reformation, in order to avoid risks, the publiccompanies ownership more tend to be concentrated rather than dispersed. Particularlyin developing markets, ownership concentration is higher. China’s stock marketstarted late, the state-owned holding enterprises accounted for the core position of thestock market has been dominated by a large proportion of public companies, familybusiness in the stock market has been excluded from the mainstream of publiccompanies，outside the play marginalized supporting role for a long-term. The splitshare structure reformed in2006, the scale of operation and influence of privateenterprise expanded rapidly, which evolved from the family business. More and morepublic companies on the stock market performance is more prominent. Compared toother public companies, family-controlled public companies control over the structureof the situation is more diverse, and ultimately control the cash flow rights andcontrol over the degree of separation, the interests of the occupation of the public companies more easily build complex pyramid. The structure of this methodimplementation. Further adopted a related party transaction, the amount of fundsused and foreign mortgage-backed and other means of non-fair emptied publiccompanies for personal gain for the ultimate control of predatory interest from theminority shareholders.Related party transactions as a neutral economic activity are widespread, but dueto information asymmetry, the non-fair related party transactions widespread inChina’s shares market, the ultimate control of the family department relatives controlgroup internal subsidiary, in fact, not consistent with the controlling stake in the cashflow rights, then repeated the related party transactions to grab the wealth of theserious infringement of the interests of small shareholders, and harm the healthydevelopment of shares markets.This paper uses principal-agent theory, the opportunity cost of voting rights andcash flow rights separation leading to tuning behavior as the analysis tools. Analysisof the opportunity cost of the ultimate controller of the tuning the behavior of publiccompanies motivation, consider the tuning behavior is the expansion of the LLSV(2002) model, the LLSV only given voting rights and cash flow rights separation maylead to the tuning the motive, but no analysis of public companies after theoccurrence of the tuning behavior economic impact that the transfer of resourcebenefits and opportunities for cost comparison, Therefore, in the context of votingrights and cash flows for the separation of powers, with the tuning opportunity costmodel analysis ultimately controller economic behavior. Choose of JiLin Zixinmedicine as a case analysis of its public announcement, revealing the ultimate controlof the means of implementation of the tuning behavior.