Research On The Problem Of Large Shareholder Expropriation Of Listed Companies In China

Almost every year,events of large shareholder expropriation happen in China's listed companies.However,many listed companies are faced with a shortage of funds at the same time,which is undoubtedly "exacerbated" for listed companies.The phenomenon that a single large shareholder control the entire firm still remain in many China's listed companies,which also provides convenience for large shareholders to encroach on.Large shareholders can easily use their control power to encroach on company resources and harm the interests of small and medium investors.From the judicial point of view,difficulty in obtaining evidence,high cost and no punitive fines are also the main obstacles to maintain the rights of small and medium investors.In addition,China's capital market system is not perfect,for short mechanism,there are still many restrictions,coupled with the strong one-dimensional trend in the capital market,it is difficulty to make a balance between making short and going long.Once the large shareholder expropriation has taken place,the stock price will go down and seriously damage the interests of small and medium investors.Therefore,study on the large shareholder expropriation and then restrain them can not only help improve the company performance of listed companies and the value of the company,but also help small and medium investors to identify risks to avoid unnecessary loss,at the same time,for the improvement of the judiciary also has a certain practical significance.In addition,the research on the large shareholder expropriation has great significance to improve the information disclosure of the equity pledge and short mechanism,it can also promote the healthy development of the capital market.This paper studied Huishan Dairy company as a case,based on a review of Huishan large shareholder expropriation event and muddy waters short events,and then by analyzing the financial data and industry data can conclude that the large shareholder of Huishan expropriate Huishan company mainly through undisclosed related party transactions,the use of other receivables,obtaining financing by pledging a large amount of equity.The problem of large shareholder expropriation in listed companies will not only have a bad effect on the company,but also seriously damage the interests of the small and medium investors.This paper explained the adverse affect of the expropriation of large shareholders on minority shareholders and company.Then,summed up the reasons of occurrence of large shareholder expropriation in Huishan company are: improper ownership structure,duality of chairman and general manager facilitates the expropriation,failure of government and social supervision.In view of these defects,this paper puts forward some feasible suggestions: the chairman and the general manager separate governance,establishing the director system of small and medium investors,strengthening the information disclosure of equity pledge and setting up the risk prevention and control mechanism,aggravating judicial punishment and combining with the director system of small and medium investors,improving short mechanism.The innovation of this paper is:First of all,the past research is through empirical research to study the large shareholder expropriation,and involves listed company in Chinese A stock market,this paper analyzes the problem of large shareholder expropriation of Hong Kong listed companies by case study,and enriches the research in this field.Secondly,In this paper,the short mechanism is related to the problem of large shareholder expropriation,this paper not only analyzes the supervision function of the short mechanism,but also puts forward its adverse effects,which can be used for reference to improve the short space mechanism.The limitations of this paper are:The study of cases,the analysis of financial data and the establishment of evaluation criteria are subjective.