Study On The Action And Consequence Of The Major Shareholder Reduction Of EK Company

After the restricted shares are lifted,the major shareholders can sell their shares through the secondary market,and the major shareholder of the listed company will take it for granted.However,behind the large-scale reduction,large shareholders often use their information superiority and control to influence the release of major news of listed companies,so as to reduce their holdings during the stock price rise.At the same time,it is not excluded that the listed company will actively release good news in order to cope with the reduction of the majority shareholder,or carry out the earnings manipulation to smear the financial performance to push up the stock price.China’s capital market is still in the development stage.Relevant laws and regulations have not been able to effectively suppress the improper shareholding behavior of major shareholders.The market’s incomplete and lagging information absorption has made this reduction behavior more concealed,not only serious violations.The interests of small and medium shareholders have also hindered the sustained and healthy development of China’s capital market.This paper selects EK Company(Hunan Erkang Pharmaceutical Co.,Ltd.)as the case company,mainly because the company’s major shareholder A reduction has the characteristics of time concentration and large scale,and its representativeness is strong.Combining with the literature research,it sums up the relevant research theories about the motives,timing and economic consequences of the major shareholder reduction;combined with the principal-agent theory,value investment theory and information asymmetry theory to determine the analysis framework of this paper,and specifically analyzes the reduction behavior of the major shareholders of EK company.Investigate the timing of the reduction and holding of major shareholder A and its concerted action C,and finally analyze the market reaction and the impact of reduction on operating performance.The study found that there is a surplus manipulation behavior in the event of the major shareholder reduction of EK company,which uses the accounting change policy and related transactions to inflated profits,and uses the “high delivery” to create the opportunity for reduction.In-depth analysis of the major shareholder’s reduction behavior shows that there are three main reasons for the reduction of holdings: the progress of the fundraising project is not smooth,the performance is not good;the high price reduction of stocks is profitable;the shareholding ratio of large shareholders is high,and the risk of stock market is avoided.According to the theory of effective markethypothesis,the event research method is used to explore the short-term market reaction after the majority shareholder reduces the holdings.It is concluded that the reduction of the majority shareholder of EK company on the one hand selects the precise timing of reduction,and on the other hand,it negatively affects the market in the short term.The negative impact.An analysis of the profitability,operational capability and growth ability before and after the reduction found that the reduction has a negative impact on the company’s operating performance.Finally,with reference to the case of the major shareholder reduction of the case company,the relevant opinions were put forward from three different perspectives: government departments,small and medium investors and listed companies themselves.