A Study On The Problem Of Large Family Shareholders Occupying Capital Of Company In New OTC Market

The mature capital market should have a complete institutional level.With the rapidly development of China's market economy,a more abundant capital market is urgently needed to serve different entities,so as to satisfy the different investors and financiers.In this context,the New Third Board market came into being.Compared with the high threshold of the main board market,the less restrictive New OTC market has attracted many SMEs and investors.The prosperity of the New OTC market will be of great help in solving the problem of financing difficulties for SMEs,and will also make a greater contribution to remedying the insufficiency of the low end of the pyramid of capital markets.However,most of the small and medium-sized companies in China are family-owned enterprises.They started from small workshops in the early stages,and their development will be based on family members.They will work together to make the company bigger and stronger.This development trajectory leads to business owners(usually also management).Most of them lack the awareness of public enterprises.Small and medium-sized enterprises basically remain in the family business model in the initial stage of corporate governance,financial system,and business philosophy.They do not have a good conversion and adaptation for the New OTC market.However,when these inadequacies are reflected in the specific companies,many problems will arise.Therefore,this paper focus on the capital occupation problem that has occurred frequently in the New OTC market and mainly discusses the family companies as the research object.This article first elaborates on the basic concepts and characteristics of the family-owned company,the family-owned majority shareholder,the New OTC market,and lists the general causes of the family-dominant shareholder's occupation of funds in the New OTC market.Then it briefly introduces the theoretical basis of the thesis.Into the main part,this article uses the case analysis method and the comparative analysis method to analyze the behavior of the large family shareholders' funds occupation problem.The case analysis section starts with the introduction of the company's shareholder structure and governance structure,which reveals the complex holding relationships within the Zhejiang Chenlong sawing machine Ltd.And on this basis,this paper elaborates the situation of the capital occupation.Next,the content reveals the causes of the illegal use of funds by large family shareholders from the inside and outside.The defects of the single ownership structure and the internal governance mechanism of the company make the large family shareholders being free from restrictions and arbitrarily occupying the company's funds;the relevant departments did not strictly monitor the occupation of funds by the major shareholders of the New OTC market,and the information disclosure system of the New OTC Market.The lack of relevant laws and regulations is the external cause of the large family shareholder's occupation.Afterwards,this article further explores the influence of the family shareholder's occupation of funds on the company itself,the small and medium shareholders of the company,and the entire capital market.Specifically,large capital occupation will greatly affect the operation funds,and decrease the operating avenue.It also hinder the implementation of enterprise development strategy.The multiple-explosion scandals will also seriously damage the corporate image and affect corporate refinancing.For small and medium shareholders,the behavior of large shareholders' illegal use of funds must damage the benefits of small and medium shareholders.From the perspective of the entire capital market,violations of market order also detrimental to capital market resources allocation and affect the confidence of other investors.The reduction of this phenomenon requires the joint efforts of many parties.At the end of this article,the internal and external inquiry sequence will be adopted.First,for the company's aspects,proposals will be made in terms of ownership structure,governance mechanism.Afterwards,in conjunction with China's institutional background,there also some suggestions related with the perspective of supervision,regulation and laws.