Study On Large Shareholders' Tunneling Behavior In GQY Video Co.,LTD.

Equity structure of listed companies is highly concentrated in China. For the study of corporate governance has shifted to focus on solving the inconsistent between large shareholders and minority shareholders. There has been State holding control problem and family control problem in corporate governance in Chinese quoted companies, Large shareholders often use "pyramid" structure and other ownership structure involved in corporate governance. So large shareholders has much control power than the cash flow rights they actually have, they are likely to make use of this advantage. When large shareholders have enjoyed the right of control power that bringing them wealth, the large shareholders are likely to utilize the right to realize tunneling continually and secretly. According to the current situation of China's capital market and the system of our country, minority shareholders are in the environment which is lack of legal protection. The illegal cost of large shareholders is far less than the income of tunneling.This paper has reviewed the research of tunneling. Combined with the system of legal protection to minority shareholders, the information disclosure system and supervision system and other institutional background in China, based on information asymmetry theory, agent theory, investment protection theory, we chose GQY Company as study subject. We studied the causes and the consequence of large shareholders' tunneling through analyzing financial data and other data in Wind data base and CSMAR. We use the event study to verify the market's attitude to the company's largest shareholders' tunneling behavior. It analyzes the causes of major shareholders' tunneling behavior in GQY company. Verify the fact that the related transaction is one of the important tunneling methods to large shareholders.Through the study of the case of this article, we made recommendations to suppress large shareholders' tunneling behavior. Strengthen the independence of the board of directors to ensure that the listed company has a good atmosphere; Introducing institutional investors to strengthen the checks and balances of major shareholders; It should be more concerned about the protection of minority shareholders' equity in laws and regulations, to help build awareness of self protection of minority shareholders. Let media as a third-party supervision power. In order to build healthy China's capital market, it is important to strengthen penalties for violation, strengthen the implementation of information disclosure of related transactions.