A Case Study On The Realization Of Tunneling Benefits

The result of study conducted by La and Porta et al.(1999)found that few of the company's ownership structure is decentralized,but showed a trend of concentration in these countries without the protection of common law.the second types of agency problems between the controlling shareholders and the minority shareholders —— the tunneling problems,has disturbed the normal development of China's securities market for a long time.In addition,“the controlling shareholers take advantage of the mainland securities market and the Hongkong securities market both to carry out the action of tunneling”,what is the new characteristics of tunneling problems makes it more subtle and more harmful.In order to safeguard the legitimate interests of the majority of minority shareholders,it will produce practical significance to identify the tunneling behavior of controlling shareholders more effectively,and recover the interests of majority shareholders by tracking the tunneling process of controlling shareholders.This paper takes the Langchao Electronic Information as the research object,and gets the following conclusions:(1)This paper believes that controlling shareholders transfer their assets form one subsidiary to another subsidiary does no harm to the controlling shareholders.They keep total assets unchanged through the pyramid structure and the way of cross shareholdings.But for the majority of minority shareholders,the listed company could have brought huge profit to them,but the controlling shareholders damage the company's ability to continue to grow.That make the majority of minority shareholders can't achieve their desired investment objectives.(2)A series of characteristics of listed companies of Hong Kong Stock Exchange,such as the different information disclosure requirements between the Shanghai&Shenzhen A-stock Markets and Hong Kong stock Exchange markets.(3)As a off shore company,the listed companies of Hong Kong Stock Exchange show little information on their internal organizational structure to outsiders;off Shore Companies enjoys the free flow of capital,make the possibility of capital outflows objectively through the asset allocation process of controlling shareholders.According to the above conclusions,this article gives some suggestion to improve the unequal treatment between controlling shareholders and minority shareholders:(1)Improveing the cost of illegal,so that the controlling shareholders can not benefit from tunneling.(2)The establishment of minority shareholders to monitor the green channel,checks and balances of controlling shareholders alone.(3)Play the role of media supervision,restricting the tunneling of controlling shareholders.(4)Enhance the independence of external audit.(5)Strengthen the contact between the Shanghai&Shenzhen A-stock Markets and Hong Kong stock Exchange markets,and provide a fair investment environment.(6)Explore the establishment of the defendant is responsible for the burden of proof system,and promote the diligence of major shareholders diligence.