Research On The Path And Economic Consequences Of Reducing Holding-Shares For Major Shareholders

Major shareholders and senior executives of listed companies reached a climax of reducing holding-shares in 2015.In that year,the amount of Wanbangda company's reducing holding-shares was the largest in the growth enterprise market.At the next day that Wanbangda's share price reached its peak,one of members of the Wang's family begain to reduce holding-shares,and the members of Wang's family reduced 21.99% of company's shares in less than a month.Totally,this family got nearly 6 billion yuan by means of large deals.In May 2017,the CSRC issued the most stringent regulations about reducing holding-shares for major shareholders and senior executives of listed companies(2017).Taking Wanbangda company for an example,this study explored the way of reducing whole holding-shares,and analysed the economic consequences.In this paper,the study found that: 1)some members of Wang's family realized to reduce whole holding-shares by releasing good news not substantive,coupled with secuitis traders' radical research results,which made the share price rise.Finally,retail investors were attracted to enter market and major shareholders redeced whole holding-shares in a high price.2)the economic consequences of "liquidation" of major shareholders were reflected in the decline in the market wealth effect and profitability of the company,the damage to the interests of small and medium-sized investors,and the increased uncertainty of corporate governance.3)to reduce the shortcomings of the new regulations on the connection between different ways of reduction and intensity of punishment,the paper put forward suggestions on improving the new regulations and increasing intensity of penalties for the behavior of reducing whole holding-shares illegally.In addition,it is suggested to improve the regulations related to the disclosure of infractions,and optimize the corporate governance of family enterprises.