Research On Tunneling Behavior Of Major Shareholders From The Perspective Of Internal Control

Since the beginning of the 21st century,the rapid development of the capital market has brought a new round of challenges to the internal control of listed companies.Cases of financial fraud and tunneling by major shareholders of listed companies at home and abroad frequently break out,such as Huaze Cobalt and Nickel Material Company,Hareon Solar Technology Company,letv,etc.Behind the scandal of these major shareholders' encroachment on the interests of listed companies is the fact that the internal control mechanism of the company is defective.Crisis after crisis continuously promoted the improvement of the global regulatory system.America soon introduced the sarbanes-oxley act,and China also formulated the basic norms of enterprise internal control.Since the reform of non-tradable shares,Chinese regulatory authorities have issued laws and regulations for many times,continuously strengthened corporate governance,protected the interests of small and medium-sized shareholders,and the protection of small and medium-sized investors has become the focus of overall market supervision.However,there are still many problems in the execution to prevent the encroachment of major shareholders.Therefore,it is a research subject of practical significance to analyze the causes of internal control failure of tunneling events of maj or shareholders at home and abroad and provide references for improving the internal control of listed companies in China.This paper chooses the tunneling case of the major shareholder of Baoqianli as the case study.as the case study.In February 2015,Baoqianli successfully backdoor zhongda shares,and after the successful listing,Baoqianli really took on a new look.,which not only successfully ended the eight consecutive years of losses,but also made the company's stock price advance by leaps and bounds.But soon,the CSRC launched a series of in-depth investigations into the company,which ended the fairy tale of turning a corner.The tunneling of major shareholders has exposed a huge defect in internal control.Therefore,we have to reflect on this,whether the key of this case lies in the significant defects of internal control?Can it bring new ideas and suggestions for the optimization of the internal control mechanism of Chinese listed companies?This paper first introduces the research background,research purpose,research significance,and describes the research ideas and innovation.Secondly,the paper reviews the thinking of global scholars on tunneling behavior of major shareholders and the research status of internal control,and expounds the theoretical basis of the paper.Chapter three gives a brief description of the background of the tunneling case,causes of the tunneling case and a series of analysis on the serious economic consequences of tunneling of major shareholders based on this case.The fourth chapter,based on the perspective of internal control,takes the five elements of internal control as the analysis framework and deeply reflects on the specific practices of tunneling of the maj or shareholders of Baoqianli.Chapter five gives some suggestions to improve the internal control of listed companies.In the end,the thesis sums up and reflects.In this paper,literature analysis method and case study method are used to review and study relevant research literature on tunneling behavior of major shareholders at home and abroad,so as to have a comprehensive and rigorous cognition and understanding of basic theoretical knowledge.By collecting and consulting the internal and public information of the company,we have a comprehensive grasp of the operation situation of the company before and after the case,and analyze the economic impact of the failure of internal control mechanism on the company.Finally,from the perspective of the five elements of internal control,this paper systematically analyzes the major defects of internal control reflected in the tunneling behavior of the major shareholders of Baoqianli,and finally puts forward practical optimization Suggestions for similar problems in China's listed companies.The main contributions of this paper are as follows:firstly,the selected cases are typical and timely.The tunneling case of major shareholders of Baoqianli is a recent case in which major shareholders with great influence encroach on the interests of listed companies.There are many problems in all aspects of the five elements of internal control,so it is typical.Secondly,the research perspective is innovative.In the past,researches on tunneling behavior of major shareholders were generally empirically analyzed from the perspective of internal control.In this paper,an in-depth analysis of a specific case was made from the perspective of internal control,so as to remind listed companies in China that they should not neglect or even build internal control mechanism and play an important role.