Research On The Suppression Of Tunneling Of Major Shareholders In Zhongkeyunwang Company Under Major Shareholders' Stock Selling

Under the situation of highly centralized ownership,the study of principal-agent has developed from between shareholders and managers to the major and minority shareholders.Because of their highly controlling rights,the major shareholders can tunnel companies.So,it is significant to study tunneling of major shareholders.In recent years,the phenomenon of the shareholders selling their shares has become more and more intense.However,after stock selling,major shareholder still hold the control rights,the risk of sold part has transferred to others,which will lead tunneling.So,is it one of the motivations of tunneling?Thus,this paper takes shares selling as the point cut to study tunneling in Zhongkeyunwang Company.Based on Principal-agent Theory,Signal Theory and Corporate Governance Theory,this paper firstly analyzes the major shareholders' cost of tunneling before and after selling,and it shows that shares selling will reduce the cost of tunneling or it can become one of powerful means reducing the cost.And corporate governance can effectively restrain it.This paper next focuses on the case of Zhongkeyunwang Company,and discusses its' major shareholder selling shares,expropriation level before and after selling,from the perspective of connected guarantee,connected transaction,appropriation of non-operating funds and excess cash dividend.We find that after selling,the cost of tunneling could significantly fall and major shareholders increased the level of tunneling.Because of it,operating performance greatly reduced,and the interests of minority investors' interest have been damaged.Then,the paper analyzes the reasons why major shareholders can achieve tunneling from internal and external aspect.Finally,we put forward suggestions in two aspects,internal governance such as lower the control of major shareholders,improve the standardization of the board of directors,strengthen the supervision of the supervisory board,prompting the interests of managers and all shareholders tend to be consistent and improve information disclosure system,and external governance such as improve the market and law play the role of guarantee and supervision.