Case Study On The Tunneling Behavior Of Major Shareholders Of Fuguiniao

Fuguiniao company was founded in the 1990 s,is a private family enterprise.It has won hundreds of honorary titles such as “China Shoes Industry Quality Leading Enterprise”.With good performance,Fuguiniao is a well-known brand in China.In 2013,Fuguiniao company became the first private enterprise listed in Hong Kong under the new policy.It is such a company that makes industry and products with heart.However,after its listing,its business performance has been declining year after year and its stock is facing delisting.Moreover,Fuguiniao broke out the bad bond default event in 2018,and has created the cheapest corporate bond in the history of China's capital market.Due to the bad bond default event,the decline of Fuguiniao company after its listing in Hong Kong has attracted wide attention of the society.Based on principal-agent theory and self-interest theory,this paper adopts literature research method and case study method to analyze the reasons for the decline of Fuguiniao company after its listing.This paper starts from the exploration of the reasons for the decline of Fuguiniao company after it went public and finds out the “amazing inside story” of its major shareholder tunneling the company.The tunneling behavior of major shareholders is the fundamental cause of the decline of the company.Based on this,this paper analyzes the tunneling behavior of major shareholders to reveal the reasons for the decline of Fuguiniao company after its listing.This paper analyzes the causes and ways of the tunneling behavior of the major shareholders,and deeply analyzes the tunneling behavior of the major shareholders from the perspective of creditors.Finally,it tries to put forward countermeasures that can effectively suppress the tunneling behavior of the major shareholders.Through careful study,it can be found that the major shareholders of Fuguiniao company mainly create non-explicit correlation and secretly transfer the company's assets by means of external guarantee and capital lending.From the perspective of creditors,the tunneling behavior of the major shareholders of Fuguiniao company is extremely “deceptive”,and the tunneling behavior of major shareholders is one of the reasons for the default of corporate bonds.This paper analyzes the reasons for the tunneling of the major shareholders of Fuguiniao Company from two aspects: objective reasons and subjective motivation.From the perspective of objective reasons,the "one-dominant" shareholding structure and board structure of the company,opaque information disclosure and defective external supervision provide convenience for major shareholders to implement tunneling behavior,so that the tunneling behavior of major shareholders was not discovered in time.From the perspective of subjective motivation,the blind external expansion of the major shareholders has generated huge capital needs.In order to make up for the capital needs,the major shareholders of Fuguiniao company have the motivation of tunneling.In view of the reasons for the tunneling of Fuguiniao company,this paper proposes countermeasures to prevent the tunneling behavior of major shareholders from four aspects.It is expected that the tunneling behavior of major shareholders can be properly prevented,so that the listed companies can operate normally,the interests of small and medium-sized investors can be effectively protected,and the healthy development of the capital market can be maintained.