Study On The Encroachment Behavior Of Large Shareholders And Its Economic Consequences

With the shift from planned economy to market economy,Chinese companies have gradually shifted from state-owned to non-state-owned.However,the phenomenon that the largest shareholder of a company in China is monopolized is still widespread.Large shareholders often have absolute or relative control of the company.In addition,due to the relatively late start of China's capital market,relevant laws and regulations and regulatory measures are still not perfect,and there is no perfect mechanism to protect the interests of small and medium shareholders.In this case,large shareholders have the opportunity to use their own advantages in control to seek private gains in control,and to invade the interests of listed companies and small and medium shareholders.Since the equity division reform,China's regulatory authorities have issued a number of laws and regulations to strengthen corporate governance and protect the interests of small and medium shareholders.The protection of small and medium investors has been the focus of market supervision and prevention of major shareholder infringement.However,the behavior of the majority shareholder is still banned.There are still large shareholders who ignore the supervision,and use the cover of funds and external guarantees to encroach on the interests of listed companies and seek private interests for themselves,which greatly damages the interests of listed companies and small and medium investors.It has a very bad influence on the healthy development of the capital market.How to prevent large shareholders from occupying behavior and protect the interests of listed companies and small and medium-sized investors from encroachment is a key factor in ensuring the healthy development of China's capital market.The study of the expropriation behavior of large shareholders and its restraining mechanism is also a practical and inevitable requirement.This paper takes Jiangsu Protruly Video Technology Group Co.,Ltd.as an example,adopts literature research method,case study method,event research method,and comparative analysis method,and sorts out the previous domestic and foreign scholars' research on the expropriation of large shareholders,and based on the entrusted Agent theory,information asymmetry theory,and private benefit theory of control rights,analyzed the specific cases of the infringement of the majority shareholder of Protruly.In the case analysis section,firstly,we introduced the basic situation of Protruly Company and the expropriation of major shareholders.Secondly,it analyzes in detail the influencing factors,the main methods and the economic consequences of the occupation of the large shareholder of Protruly.In the end,aiming at the specific cases of the occupation of the large shareholder of Protruly,the author puts forward some suggestions to curb the expropriation of large shareholders,with a view to curbing the expropriation of large shareholders,protecting the interests of small and medium shareholders,and promoting the healthy development of listed companies and capital markets.This paper believes that the main factors influencing the expropriation behavior of major shareholders are the four aspects: the internal governance of the company,the lack of external supervision,the low cost of violation of major shareholders,and the lack of restraint effect of small and medium-sized investors;Methods include illegal guarantees,huge foreign investments,large amounts of prepayments receivables and fictitious agreements for listing on the back door;the seizure of Protruly's major shareholders has had adverse economic consequences,resulting in a sharp drop in the stock price of listed companies,earnings per share,and per share operations.The decrease in cash flow caused a serious loss in the company's operating results,which had a negative impact on small and medium investors and listed companies.Based on the research of theories and cases,this paper puts forward feasible suggestions for preventing large shareholder misappropriation and protecting the interests of listed companies and small and medium investors,including improving the internal governance of the company;improving external supervision;improving the legal system and increasing the illegal cost;There are four aspects of the restricted role of small and medium investors.This paper adopts a combination of theory and case studies,and systematically analyzes the behavior of the majority shareholder infringement.On the one hand,it has enriched the relevant literature on the study of the expropriation behavior of large shareholders,and has added case studies,which has certain theoretical significance;on the other hand,this paper proposes a feasible proposal to prevent the occurrence of expropriation by large shareholders,and it has great The acts of shareholder misappropriation,the protection of listed companies and the interests of small and medium investors have certain practical significance.