Study On Motivations And Consequences Of Ultra-Ability Dividends Payout

Dividend policy is one of the four core contents of modern corporate financial activities,which is closely related to the interests of investors and the operation and development of enterprises,is the result of the balance between the reinvestment of corporate earnings by listed companies and the return to the majority of shareholders.In the 1990s,more than half of listed companies showed weak willingness to pay dividends,no gold dividends were found,and investors had no return on investment.After 2001,in order to protect the rights and interests of small and medium-sized investors,China Securities Regulatory Commission successively introduced relevant dividend policies to promote dividends,and the number and scale of dividends were significantly increased.However,with the emergence of China’s semi-mandatory refinancing policy,the behavior of ultra ability dividends payout,which is almost non-existent in the western developed capital market,has aroused extensive attention and heated discussion among investors.Ultra ability dividends payout is an irrational behavior regardless of its own ability and operating conditions.It is considered as a tool for controlling shareholders to deliver interests and seriously infringes on the rights and interests of minority shareholders.Based on this,this paper summarizes and elaborates the relevant theoretical research on dividend policy,and constructs the theoretical analysis framework of this paper.This paper studies ultra ability dividends payout of the Fangda Special Steel Technology Co.,LTD through the method of case study.First of all,the motivation of the company’s ultra ability dividends payout is that the controlling shareholders’ interest transmission to alleviate the capital pressure and the executives’ self-interest in holding shares,rather than the return to the majority of investors.Secondly,the conditions for Fangda Special Steel Technology Co.,LTD to implement ultra ability dividends payout are as follows:the shareholding structure is controlled by major shareholders,the "integration of two powers" of management and controlling shareholders,the weakening of the functions of the board of supervisors and the policy guidance of CSRC to encourage dividend.For the consequences of ultra ability dividends payout,found that the medium and small shareholders’ interests have been infringed,affect the enterprise daily management,inhibits the long-term development of the company,make a serious shortage of cash flow,influence corporate investment and financing policy,further increase the risk of enterprise financial policy,capital markets reacted coolly at the same time,no shareholders are the wealth of benefits.Finally,this paper puts forward relevant suggestions based on the specific situation of this company.First,improve the semi-mandatory dividend system and regulatory system,formulate flexible dividend rules,implement differentiated dividend,and strengthen information disclosure.Second,strengthen corporate governance to form a mechanism of checks and balances.Third,improve the legal mechanism for the protection of the rights and interests of minority shareholders.It is hoped to provide reference for improving the policy of relevant supervision institutions and promote the healthy development of Chinese capital market.