The Study On Tunneling From Related Party Transaction About Listed Companies In China

The phenomenon of related party transactions of listed companies in our countryis very normal，which provides convenience for controlling shareholder tunneling.From the current development situation, the case of controlling shareholders usingrelated party transactions for tunneling and finally punishing by CSRC occursfrequently. This kind of behavior serious damages the company’s interests andinfringes the rights of small and medium-sized shareholders. Meanwhile, it is also notconducive to the optimal allocation of market resources.In our country, stripping internal assets quality and restructuring the high qualityassets of listed through parent company has been quite common. Companies listed inthis way have a higher risk of tunneling compared with other listed companies interms of related transaction. Yaxing chemical company selected in this paper is thetypical representative of this kind. First of all, this paper reviews the relevant researchresults in the field and puts forward the related theory such as corporate governancetheory, principal-agent theory, associated trade theory and tunneling theory in thetheoretical part. Then this paper analyzes in detail the related financial data of Yaxingchemical company, studies the method of connection transaction tunneling they use,points out economic consequences this behavior will cause to the company, from theperspective of corporate governance explains why this kind of behavior exists in thecompany and analyses the relationship between the corporate governance mechanismand such behavior. These analyses show that the controlling shareholders use ofrelated party transactions of tunneling behavior is abundant in yaxing chemical. Wecan also find the identification of related party transactions of listed companies oftunneling method based on the above analysis.Due to seriousness of these problems,this paper finally puts forward its own suggestions specific to these problems, hopingthese suggestions can reduce the controlling shareholder’s related party transactions oftunneling behavior and trying to ensure that the majority of small and medium-sizedshareholders interests and the company’s interests will not be damaged.