How Major Shareholders Get Benefit By Secondary Market

Since the 2005,China began its reform of the shareholder structure of listed companies.Its securities market has gradually entered the era of full circulation.With the gradual maturity of capital markets,the situation that those shareholders of listed companies with same shares but different rights has changed to a certain extent.However,the major shareholders have been got benefit from reducing the stocks on secondary market instead of occupying plentiful fund or guaranteeing illegally with the restricted stocks have been unbanned and exchanged.The phenomenon that the major shareholders sell the stocks while raising the stock price by managing surplus and manipulating the major information disclosure to occupy the interests of small and medium investors is particularly serious in the private enterprise.This thesis analyzed Hareon Solar Corporation through its various actions from its backdoor listing to its high level dividend three years after listing,include its profit compensation agreement,private placement and reducing stocks of its major shareholders.This thesis found out that the major shareholders had been prepared selling their stocks before the corporation listed,the financial position of the company couldn't match its dividends and private placement,and it can been seen that there were serious insider trading from grasping the time and the degree of reduction of the major shareholders.This thesis pointed out that there are some defects in the governance structure of the private listing corporation,and when the company was in poor performance,the major shareholders threw stocks in order to obtain benefit.Considering the problems above,the small and medium shareholders should improve the ability to identify the real situation of listing corporation,the major shareholders should have responsibility to improve the company's business development,the relevant supervision department should strengthen the power of management and punishment.