A Study On Large Shareholder's Expropriation From The Perspective Of Corporate Governance

The early research in the field of corporate governance mainly focuses on the conflict of interest between managers and possessors under the premise of equity dispersion,and with the gradual cognition of the concentration of equity in capital markets,the interest conflict between shareholders has been paid more and more attention by the practical and theoretical circles.On the other hand,in the practice of this field,the cases of large shareholder's Expropriation have been emerging one after another for intricate reasons in China,the emerging capital market,and the interests of small and medium-sized investors have been seriously infringed.Under this background,it is of great significance to study the encroachment behavior of large shareholders based on the perspective of corporate governance.Through the literature research,it is found that the study of tunneling often takes the decentralization of equity as the implicit assumption,focuses on the governance of partial tunneling issues or evaluation of the effect of individual governance schemes,which lacks the specificity and systematicness on the object.Therefore,this paper,based on the complete framework of corporate governance connotation,combined with the realistic governance environment and typical case analyzing the behavior of large shareholders,try to fully reveal the occurred approach,influence and formation mechanism of tunneling in the representative case,aiming at providing useful thoughts for systematic study of tunneling.*ST Baoqian's five-year-long practice of expropriation has had a bad impact on Chinese capital market,which has been widely concerned by the society,therefore the study of this typical case is of remarkable significance.This paper firstly summarizes many literatures related to large shareholder agency,protection of the interests of minority investors and corporate governance,and establishes the research framework of this study on the basic concepts and theoretical basis of corporate governance connotation.Secondly,through the data statistics to study the current situation of expropriation,analyze the generalized background of the case from macroscopic view.And finally,the use of case study method carry out a systematic analysis of the paths,influences and governance reasons of the interests of tunneling.The study found that the majority shareholders of *ST Baoqian have infringed on the interests from this company through profits and losses transfer,assets occupation,illegal guarantee and disclosure,which has resulted in the loss of assets of listed company,deterioration of operations and decline of corporate value,and has greatly infringed the interests of small and medium-sized investors.The research of the governance reasons shows that there are property rights arrangement problems and defects in the governance mechanism.On the one hand,the large-scale equity pledge and imbalance allocation of company control have destroyed the equilibrium of risk and income,the function of incentive and restraint of property rights being weakened.On the other hand,the corporate governance mechanism is flawed.Specifically the insufficient legal protection and weak external audit lead to the weakening of supervision,and the large shareholders oriented governance body seek themselves own interest through the control of shareholders? meeting resolutions,manipulation equity incentive and independent director mechanism design.The interaction and influence of corporate governance problems at two levels shape the corporate governance pattern and lead to the expropriation.Finally,based on the analysis and conclusion of the cause study,this paper puts forward the targeted countermeasures and measures of improvement from the two levels of property rights arrangement and governance mechanism design.