The Research On Ultimate Control Of Private Listed Companies With Pyramid Shareholding Structure Who Deprives The Interests Of Medium And Small-sized Shareholders

Private enterprises have played an immeasurable role in the course of China’s economic take-off. To seek financing way and promote the further development of private enterprises, more and more private enterprises try their best to become listed companies. In recent years, however, Ultimate control of private listed companies who deprives the interests of medium and small-sized shareholders is not uncommon, and such phenomenon’s emergence has a close relationship with corporate governance models. Among these models most companies adopt the pyramid shareholding structure. In the long term, it will weaken medium and small-sized investors’ investment confidence, and then hinder the development of the capital market. Therefore, it has become the top priority for private listed companies to stop controlling shareholders from depriving the interests of small shareholders and the resources of listed companies.This paper begins with a brief review of the domestic and foreign scholars’ research on the shareholding structures of listed companies in different modes of governance, pyramid ownership structures, and private listed companies’ ultimate control over the way to deprive interests of minority shareholders, as well as the pyramid shareholding structures’ effects on the value of the company. Secondly, this paper explains the related concepts of pyramid shareholding structure, and analyzes the reasons why private enterprises choose to be listed and why minority shareholders’interests are deprived after listing. Then this paper analyses minority shareholders’specific performances of ultimate control over depriving interests. Meanwhile, this paper also puts forward assumptions in view of the above comprehension, and with the help of empirical, the influencing factors and underlying reasons why minority shareholders’ interests are deprived under the pyramid shareholding structure are explored. This paper also probes into the ultimate controlling shareholders’ performances (hollowed behavior and support behavior) to affect listed companies’ value. Finally, this paper puts forward the corresponding suggestions from the improvement of the internal governance, external supervision and legal aspects together with the above analysis.