External Governance Mechanisms And The Tunneling Behavior Of Controlling Shareholders In The Listed Companies

Our country is now in a critical period of its economic transformation and upgrading. After the development of more than20years, the stock market possessed a fairly large scale. However, big shareholder looting of medium and small shareholders is a serious problem. In order to encroach the interests of minority shareholders, controlling shareholders through various means, such as related party transactions, free of charge to take up capital hollowed listed companies. This behavior has brought great harm to the listed companies and the healthy development of securities market in China. The issue of empty the controlling shareholder of listed companies is widespread. In addition to the special equity structure, imperfect internal governance mechanisms and other factors, there are inadequate legal protection of minority shareholders, external audit role did not give full play to the supervision of and control over external governance factors such as market has just started, a number of factors combined together to make it is necessary for us will be the focus of attention from the conflicts of interest between shareholders and managers to conflicts of interest between shareholders. So the research subject of this article has strong theoretical and practical significance.Based on the qualitative analysis the relationship between corporate governance mechanisms and controlling shareholders hollowed behavior, the concrete manifestation of empty controlling shareholders of listed companies and its harm to listed companies and even the entire capital market has been systematically expounds. Then it analyzed the current situation of our country corporate governance mechanism and its effect on controlling shareholders hollowed behavior, and make feasible suggestions to external governance mechanism of inhibition of hollowed behavior controlling shareholders. This article shows that, under the condition of the internal governance mechanism failure, external governance mechanism inhibitory effect of controlling shareholders hollowed action should not be ignored, especially the legal protection of investors, the market for corporate control, external audit and product market competition, these kinds of effective implementation of the external governance mechanism, play a key role on the controlling shareholders of listed companies of our country inhibition of hollowed behavior. Therefore, we must take practical efforts to increase protection of small investors, deepen the reform of state-owned property rights system, improve the quality of external audit and other measures to promote effective competition in the industry.