Case Study On Capital Occupation Of Major Shareholders In SUNDIRO HOLDING CO.,LTD

In recent years,the overall size of China's capital market has been growing rapidly,with the market system becoming more and more sound,but there are still some problems.The problem of the capital occupation of major shareholders has been there since the emergence of the capital market,and the major shareholders of listed companies use their dominant position to encroach on the company's funds for their own benefits,which in turn produces a series of negative effects.China's relevant institutions have issued lots of corresponding laws and regulations,to a certain extent to curb the occurrence of this phenomenon,protect the legitimate rights and interests of stakeholders,and promote the effective operation of the capital market.However,due to the many defects within and outside the company,and the large shareholder's means of occupying firms'funds are more and more covert and diversified.The problem of large shareholder capital occupation has appeared to rise,so it is necessary to study the act of large shareholder capital occupation in depth.Based on the relevant theories,this thesis takes the case of the capital occupation of major shareholders in SUNDIRO HOLDING,one of the listed company's comprehensive category.In April 15_th,2019,the company was implemented a warning of other for its funds was occupied.At the same time,as a result of this incident,the CSRC has taken administrative supervision measures against SUNDIRO HOLDING to cope with this problem.This kind of incident is also sufficient to attract the attention of the capital market,which in turn drives companies to make corresponding improvements,internal and external,to keep such incidents from happening again.This thesis mainly analyzes the causes and effects of the capital occupation of major shareholders in SUNDIRO HOLDING and draw the corresponding enlightenments,after referring to domestic and foreign relevant documents,the public announcements,financial reports and other information issued by the listed company,and with the use of literature analysis method and case analysis method.Through analysis,this thesis finds that the reasons for the happen of the capital occupation behavior of major shareholders can be classified as internal and external factors.The internal reasons includes that the major shareholder possesses dominant position in the company,the company's internal control system has not been implemented,the supervisory board has not played a corresponding supervisory role to facilitate the violation of the major shareholders,and the large shareholders'act of repeatedly pledging a large number of equity will also directly affect the their decision.The main external reasons include the low cost of defaults,the lack of effective protection of small and medium-sized shareholders and the difficulty of supervision.Based on the analysis of financial data and other relevant indicators,this thesis finds that capital occupation has seriously undermined the company's performance,mainly reflected in four aspects consisting of the debt paying ability,financing capacity,profitability and future development capacity.At the same time,once the capital occupation problem disclosed,the company's image will be seriously damaged,the stock price fall sharply,and stakeholders'interests be seriously damaged.On this basis,this thesis draws the corresponding enlightenments.First,the company should introduce strategic investors,establish the equity entrustment voting mechanism to form internal balance,and the internal control system should be implemented as soon as possible.Meanwhile,through the introduction of external supervisors,the implementation of the equity incentive system could prevent such incidents from happening again.In addition,the legislature and regulators outside the company should also make corresponding improvements to moderately raise the cost of large shareholders'misbehavior and improve the protection mechanism of small and medium-sized shareholders,with carrying out all-round supervision so that the major shareholders give up the fluke mind and thus curb such incidents.It is hoped that the case study of SUNDIRO HOLDING can provide some reference for solving the problem of capital occupation of large shareholders.