A Study On The Transfer Of Control Rights Under The Influence Of Social Capital

The existing theory of corporate governance generally holds the opinion that when there is a controlling shareholder,the major shareholders has the incentive to encroach on the interests of the small shareholders and form the principal-agent problem between the major andsmall shareholders,and whether the consequences of such agency problems will cause the control rights transfer,the existing literature less concerned about.On the control rights transfer,the existing research is mainly based on the assumption of active transfer or reorganization of the controlling shareholder.The change of the largest shareholder is the same as the control rights transfer,and the determination of the law for whether the control rights is transferred is also based on the ownership structure.However,the existing research shows that the control rights are constituted by the right of controlling shares and social capital.For the relative controlling shareholder,due to the lack of its equity capital,the major shareholders relies on social capital control to achieve the goal of holding,and the social capital control as a kind of informal system' s arrangement,it has unstable characteristics,so the transfer of control rights should take into account the impact of social capital.This paper attempts to discuss the premise,process and influence of control rights transfer under the influence of social capital,taking major and small shareholders as an example,in the case of the control rights dispute on Kong Group Co.,Ltd.2014 annual shareholders' general meeting.The case analysis is composed of four parts:the prerequisite-the formation of the relative holding of major shareholders;the dynamic evolution process of the major shareholders' social capital-the quantitative change and the qualitative change;the determination of the control rights transfer of the major shareholders;the influences of the control rights transfer on the major shareholders and Kong Group Co.,Ltd..The study of this paper shows that major shareholders is in a relative holding status in the early stage,which mainly depends on the social capital control.However,the social capital is highly unstable.When the major shareholders deprives Kong Group Co.,Ltd.by the dual control of equity capital and social capital,the medium and small shareholders to weaken their trust,which led to the lack of social capital of shareholder level,transfer to the seats change of the directors of the board,terminate of the complete reshuffle of the members,the major shareholders lost of the right on company's shareholders,directors and managers,The control rights of Kong Group Co.,Ltd.had a transfer.Further analysis shows that the control rights transfer for the Kong Group Co.,Ltd.and the major shareholders is a "double lose" situation:for Kong Group Co.,Ltd.the huge personnel shock brought about the huge loss is unbearable;Shareholders,the Kong Group Co.,Ltd.couldn' t be incorporated into the scope of consolidation will affect their performance appraisal by the SASAC management.The practical significance of this paper lies in the fact that there are a series of problems such as inefficient operation and serious administrative problems in China's state-owned enterprises.Whether state-owned enterprises have diversified their stock rights in the process of diversification of stock ownership to diversification(they have become public companies),how to deal with the relationship between small and medium shareholders is particularly important,the state-owned major shareholders to actively fulfill the fiduciary duty to respect and protect the interests of medium and small investors in favor of the stability of its social capital control,then achieve the win-win situation.