The Research Of The Long-term Zero-dividend Distribution Of Listed Company Based On The Investors’ Protection

Protecting the interests of small investors become the focus of attention of the communitiesbecause that investor legal protection in our country is not perfect and the relatively concentratedownership structure. In2013, the State Council promulgated on investor protection "The article9ofthe country". In this paper, the theory of a bird in the hand, principal-agent theory, benefits ofcontrol theory are used to analysis the zero-dividend distribution of listing Corporation against theinterests of small and medium shareholders. Different form most of the literature, the paper will putthe protection of the minority shareholders, the biggest shareholder tunneling and zero-dividenddistribution into consideration, and find occupation and connected transaction as the main way oftunneling. There is a positive correlation between the occupation and the dividend policy, and thereis a positive correlation between the occupation and the connected guarantee. In the listingCorporation of medical industry, the existence of zero dividend distribution and the tunneling ofmajor shareholders will damage the interests of small shareholders.This paper takes the TongCe medical as a typical case study of dividend distribution, theoccupation and the connected guarantee of listing Corporation, and reached the followingconclusions: In the listing Corporation of medical industry, the existence of zero dividenddistribution and the tunneling of major shareholders will damage the interests of small shareholders.The relatively concentrated ownership structure and the small residual cash flow right are the mainreasons of tunneling and zero-dividend distribution policy. The relative concentration of ownershipstructure leads to the general meeting of shareholders become a mere formality, board of directorsopetate in the the interests of the holders of blocks of shares. So small shareholders can notadvocate their interests; large shareholders equity pledge, the control of a listing Corporation isunchanged but the residual cash flow right reduce which lead the residual cash flow right andcontrol right to be isolated, leading to largest shareholders have the ability and motivation toimplement a tunneling behavior, damage the interests of other shareholders. The combination ofcase research to make a conclusion that put forward the corresponding countermeasures instrengthening the role of the general meeting of shareholders, the board structure, investorprotection laws and regulations, ownership structure.