A Case Study On Major Shareholders' Clearance Reduction Of Yongda Group

In recent years,the CSRC and relevant departments have issued regulations and documents on the practice of regularizing the behavior of major shareholders and senior executives' reduction in response to the frequent incident of major shareholders and senior executives' reduction.Due to the defects in the supervision system of China's capital market,how to reduce the negative impact of major shareholders and senior executives,reduction on enterprise development in the context of frequent incident of reduction of major shareholders and huge scale of major shareholders' reduction?How to regulate the behavior of major shareholders' reduction and protect the interests of minority shareholders has become an urgent problem to be solved.This paper takes the typical case of major shareholders clearance reduction of Yongda group with huge amount of reduction in holdings and fierce degree of reduction as the case of study.Through detailed analysis of the object of this paper,it finds the existing problems of major shareholders' clearance reduction of Yongda group and draws some corresponding enlightenment based on the existing problems.Based on A brief introduction on the basic situation of Yongda group,the process and results of major shareholders clearance reduction of Yongda group.More detailed analysis about this case are mainly from the following three aspects:First,through the learning of the case concludes the reason of major shareholders holdings may exist,and then use the analysis of relevant announcements and related data to validate them;second,analyze the path of major shareholders' reduction of their holdings;analyze how to increase the stock price with main performance before the reduction of their holdings;how to arrange the reduction of their holdings in the process of reduction;analyze the exit after the reduction;and use the case study method to analyze the market reaction of important events in the reduction of their holdings;third,evaluate the economic consequences of a major shareholders holdings.Firstly,use the principal component analysis(PCA)make a comprehensive comparison between before and after the major shareholders holdings.Secondly use event study analysis major shareholders holdings reduction on the impact of the company's share price,Lastly,analyze the impact on small and medium-sized shareholders by using comparative analysisBased on the analysis and evaluation of the reason,path and economic consequences of the major shareholders reduction of yongda group,it is concluded that:First,major shareholders have strong motivation to reduce their holdings.Second,the path for major shareholders to reduce their holdings is highly hidden.Before reducing their holdings,major shareholders will improve the company's performance through various ways and drive up the company's stock price.In the process of reducing their holdings,they will reasonably choose the time of reducing their holdings and skillfully arrange the behaviors of reducing their holdings within the current legal scope.Third,the reduction of major shareholders will lead to the decline of the company's comprehensive financial performance and stock price.Fourth,the reduction of major shareholders will reduce the return on investment of medium and small shareholders and increase the investment risk of medium and small shareholders.Based on the above analysis,this paper argues that to reduce the negative impact of major shareholder reduction on other stakeholders,it is necessary for the capital market,enterprises and minority shareholders to make joint efforts.To be specific,first of all,the government should establish a sound supervision mechanism.Such as improve the information disclosure mechanism for major shareholders to reduce their holdings,strengthen the crackdown on illegal behaviors of major shareholders to reduce their holdings,improve the laws and regulations on investor protection and reduce their holdings in major transactions;Secondly,the company should establish a reasonable internal control system to avoid the infringement of the interests of other stakeholders.Finally,small and medium-sized investors should strengthen their risk awareness and professional quality.