Research On Tunneling Behavior Of Controlling Shareholders

Since April 2005,the Chinese government and regulators have started the reform of non-tradable shares,have issued a series of regulatory measures to restrict the encroachment of controlling shareholders,intensify the protection of minority shareholders.Even so,there are still many cases of controlling shareholders hollowing out public companies,especially private family-owned companies.The controlling shareholders of private family listed companies tend to exist in the family form,and their inherent family ties make the holding position more stable.In the case of increasing separation of cash flow and control,the entire control of the enterprise and the decision-making power is firmly in the hands of the controlling family members,making the corporate governance environment become more complex.The complex management environment provides convenience for the company to implement the tunneling behavior.Therefore,from the perspective of corporate governance,the research on the hollow behavior of controlling shareholders of private family enterprises has a positive reference effect.This paper selects the "the poorest listed company"--*ST Huaze,which is the case study object of the a-share market in January 2018.The company is a typical family holding company.Since January 2014 backdoor listings,its largest shareholder family through various means to take up a huge sum of funds of the company for a long time,in particularly,short-term financial instruments such as commercial paper taking up huge amounts of money,caused a major loss of the company and capital dried up,and even appeared in the third quarter of 2017,the parent company at the end of the book on the sad condition of only 178 yuan,almost become a shell company,facing delisting.This paper finds that there are obvious loopholes in the corporate governance mechanism due to the excessive concentration of ownership in family enterprises.Also,the defects of market regulation,intermediary supervision function failure,the major shareholder of * ST Huaze family use empty related party transactions of listed companies,lead to serious damage of medium and small shareholders' interests and harsh market impact.Aiming at this problem,suggestion from optimizing equity structure and the introduction of strategic investors,to set up small and medium investors,directors and supervisors,to set up the compensation mechanism,improve investor legal proceedings and broaden the private enterprise financing channels and other aspects,strengthen corporate governance and market regulation,to protect the rights and interests of minority shareholders.