A Study On The Relevance Between The Financial Scandals And The Shareholding Structure Of The Listed Companies

In recent years, the financial scandals of the listed companies have become fiercer and fiercer in the whole world. The scandals not only lead to the small investors’ disastrous losses and frustrate their confidence to invest, but also destroy the resource allocation brought by the market, which will waste the resource vastly, hinder the normal development of the capital market and the recovery of the worldwide economy. The experts find that the financial scandals result from various reasons. The corporate governing structure is an important factor. As the base of the structure, shareholding structure has inseparable link with the financial scandals of the listed companies. Hence, there exist theoretical and practical significance to investigate on the relevance between the financial scandals and the shareholding structure of the listed companies.The financial scandals mainly include two types:one is that the big shareholders occupy the public company property; another is that the managers control the incomes and profits. The main manifestations of the financial scandals have their own focus under different shareholding structure.The listed companies with highly-centralize shareholding structure have two features as follows:one is that the largest shareholders of most public companies have high shares, so they are in the absolute holding status; another is that the second shareholders have limited function of checks and balances. Under this structure, for having different interests between the big shareholders and the small ones, the big shareholders easily abuse the rights of control to hollow out the company in the case of being powerful and lacking effective supervision, hence, in our nation, the financial scandals of the listed companies mainly manifest the concept of the big shareholders abusing the rights of control to hollow out the company. Meanwhile, with the promoting of the share splitting reform and the increasing of the private listed companies, the shareholding structures present the trend of decentralization on the whole, plus the deficiency of state shareholders, the financial scandals that controlled by the listed companies increase gradually.Under the high decentralized shareholding structure of the Anglo-American listed companies, the shareholding and the management right are absolutely decentralized, which highlights the managers’ agency problems in particular. Because every shareholders holds low share proportion and lacks enough skills and willingness to supervising the managers, they always choose the mode of "free-riding" to attending the decisions, which causes the common atmosphere of "insider-control" in listed companies. Considering about the self-interests, the managers often control the profits and maximize their own profits. However under the highly-centralized shareholding structure of the listed companies in Germany and Japan, the agency problems exist in the relationship between the big shareholders and the relevant stakeholders actually. In this relationship, the stakeholders are trustors, the big shareholders are trustees. In the position of controlling, the large stakeholders have decisive influences on the managing strategy, while other shareholders lack enough power to checking and balancing. For the large shareholders and stakeholders having different interests, the formers always abuse the right to occupy the asset and damage the stakeholder’ interests. In conclusion, the fundamental reason of listed companies’financial scandals is the shareholding structure.From the point of view of containing listed companies’ financial scandals, the relatively concentrated shareholding structure of having effective checks and balances is the best shareholding structure. The shareholding structure of listed companies all around the world will convergent to this. The listed companies of our country should transform its shareholding structure to this according to four thinkings of "keeping a temperate shareholding proportion of the major shareholder","making sure several shareholders have strong capacity of checks and balances","promoting the state-owned shares to maximize exit", and "establishing and improving laws and regulations to protect medium and small shareholders".