Research On The Tunneling Behavior Prevention Of Dominant Shareholder Of Jiangyin Zhongnan Heavy Industries Co.,Ltd.

In today’s capital market,there are more abundant financing channels and financing methods,so more and more enterprises choose to become listed companies.In the current market operation,there are still some problems in the ownership structure of listed companies in China.The organizational structure of equity in many enterprises is too centralized.At the same time,the corporate governance structure is still not perfect,the internal control system is not sound.In addition,there is still a certain gap between China’s relevant laws and regulations and the developed capital markets in the west.There are still some deficiencies in the supervision and punishment of relevant management departments.As a result,the phenomenon of tunneling by dominant shareholders continued,The tunneling behavior of dominant shareholders has seriously harmed the interests of minority shareholders,hindering the growth and development of enterprises.It jeopardizes the normal operation of the capital market.Although tunneling by dominant shareholders is not uncommon,because each hollowing case has its own particularity.So a case by case analysis,it is of great significance to analyze the causes,ways and influences of the behavior of dominant shareholders to prevent the tunneling behavior of dominant shareholders.Taking ST Zhongnan as an example,this paper makes a detailed analysis of the hollowing out behavior of the controlling shareholders of listed companies.Combining theory with practice,this paper analyzes the diversified means of hollowing out the listed company by the controlling shareholder,which can enrich the relevant cases of hollowing out by the controlling shareholder.Firstly,the paper reviews the literature at home and abroad on the ways,causes,effects and preventive measures of hollowing by controlling shareholders.Then the paper defines the concept of controlling shareholder,tunneling behavior,corporate ownership structure and governance structure.Then on the basis of the principal-agent theory,the theory of control rights proceeds.Then,a case study was conducted on the hollowing out behavior of Zhongnan heavy industry group,the controlling shareholder of ST Zhongnan,and the basic situation of both companies was briefly explained.According to the analysis,the judgment basis of hollowing out of the controlling shareholder Zhongnan heavy industry group includes the controlling shareholder’s selling out for cash for many times,the frequent occurrence of debt disputes and lawsuits,the frequent resignation of the company’s directors and senior executives,and the value of the pledged shares being far lower than the financing amount.At the same time,this paper studies the ways of hollowing out by controlling shareholders,such as taking up funds,making illegal guarantee and joint loan,pledging of malicious equity,and carrying out mergers and acquisitions in related transactions.Through the analysis of the above part of tunneling,it is concluded that the causes of the tunneling behavior of the controlling shareholder are mainly the non-standard internal governance and the defects of external supervision.After that,it is analyzed that the tunneling behavior of the controlling shareholder makes the company’s development ability and profitability decline,makes the company’s actual control power transfer,damages the value and image of the enterprise,seriously infringes upon the rights and interests of the minority shareholders,and causes a negative impact on the orderly operation of the capital market.Finally,in view of the reasons for the hollowing out of the controlling shareholder,the paper puts forward some measures and Suggestions on improving the shareholding structure of the company,perfecting the corporate governance structure,improving the supervision of the CSRC and improving the relevant laws and regulations.