The Prevention Research Of Tunneling In The Bluebird HuaGuang

The principal-agent problem between controlling shareholders and minority shareholders is now the core of corporate governance issues in China. The principal-agent problem between the two mainly embodied in the controlling shareholders encroach on the interests of small and medium shareholders, the controlling shareholders exploit the resources of its exclusive control of the will of the listed company exclusive transferred to their own hands. Practice, it was found that the controlling shareholder is not always a hollowed of listed companies, sometimes to support of the listed company, this propping is often seen as the protection of investors. But, propping is the controlling shareholders as a means of maximizing the interests of the multiphase, tunneling is the ultimate goal. Therefore, between propping and tunneling inevitably there is a certain relationship.The article treat propping and tunneling as two related parts of the overall decision-making of the controlling shareholder. Based on the model of controlling shareholders utility maximization, we take the company as our case to do the analysis. First of all, through the understanding of the company’s basic situation we find the root causes of tunneling are equity concentration and the separation of property ownership and management. Then we analyze the agent of the controlling shareholder which drive it to do such behavior. Secondly, we organize the company’s regular reports and interim announcements to find the possible propping and tunneling behaviors. Finally, we take a comparative analysis of the variation of enterprise value and the utility of the controlling shareholder before and after the propping happens.The results show that: for the controlling shareholder of the company, propping is only a approach to keep the listing qualifications of the company rather than the ultimate goal. In the article, we calculate the benefit expropriation cost of the controlling shareholder, and then find that the controlling shareholder has the motivation to transfer the resources from the listed company to reinvestment. Through the analysis of the periodic reports and the temporary announcements of the listed company, we find some evidences of tunneling to support our conjecture. During the process of case analysis, we also find the main reason that the propping and tunneling of the controlling shareholder are able to achieve is the imperfection of the information disclosure system and the investor protection system. Therefore, the improvement of the information disclosure system that related to the listed company, especially the improvement of the disclosure of the company control chain, will help the related stakeholders get a more comprehensive information when they supervise the property right relationship and control relationship between the listed company and the controlling shareholder. It also will help them to supervise the related party transaction of the listed company. At the same time, the improvement of the investor protection system will increase the cost of the controlling shareholder, which will play an active role in reducing the tunneling of the controlling shareholder.