Large Shareholder Encroachment,corporate Governance And Corporate Value

Listed family business is an important part of China's capital market for its unique control structure,family business often has the phenomenon of "one share dominates the other".Therefore,listed family business has a series of disadvantages in its rapid development,that is large shareholders use their control advantages to seek private interests and encroach on the interests of small and medium shareholders.In 2014,ST Antai was exposed that the related parties occupied 1.7 billion yuan of its capital through non operating projects such as accounts receivable.After a long-term suspension of trading,the company's share price experienced 14 consecutive stops,while the company was st due to continuous losses.In 2016,ST Antai was exposed that its controlling shareholder's related parties occupied 1.3 billion yuan of operating capital.According to date statistics,in the past ten years,nearly one tenth of the funds of listed companies in China has been transferred by large shareholders through�tunnel behavior�.How to solve the agency problem between large shareholders and small and medium shareholders through corporate governance has become an urgent task for the development of listed family companies in China.Most domestic scholars find that equity balance and board characteristics have significant correlation with corporate value: from the perspective of equity balance,when the equity structure of listed companies is exogenous,equity balance can effectively curb the encroaching related transactions between listed companies and their controlling shareholders' related parties;from the perspective of board characteristics,the proportion of independent directors can restrain the controlling shareholders' encroachment caused by the separation of ownership and control.Taking ST Antai as an example,this paper studies its corporate governance structure with theoretical analysis and puts forward targeted suggestions for its existing problems,which has strong practical significance.Firstly,this article summarizes the literature review of the internal governance mechanism and external governance mechanism effect on the corporate behaviors controlling and summarizes the status of the major shareholder' encroachment on the interests of listed companies in China according to the related basis.Secondly,through the case study,it is found that Li AnMin,the controlling shareholder of ST Antai,has carried out the "rescue" behavior to the related party Xintai Iron and steel by occupying the huge amount of funds of ST Antai through related party transaction.Thirdly through the analysis of the governance structure of ST Antai,such as theserious lack of equity checks and balance in the equity structure,the controlling shareholders Li AnMin's "one share dominance",the lack of independence of the independent directors,the difficulty of the board of directors to play its role,and the lack of supervision of the external governance mechanism,which all provide objective conditions for Li AnMin to occupy ST Antai funds pieces.Finally,through the analysis of financial date,it is found that the event that Li AnMin,the controlling shareholder,occupied ST Antai's capital worsened ST Antai's financial situation and seriously damaged the company's value.Through the event study method,it is found that the market reaction to the event of ST Antai's major shareholder's occupation is negative,while ST Antai's share price has fallen sharply and investors' interests have been seriously damaged.Therefore,when the corporate governance structure of listed companies is defective,large shareholders are more likely to make self-interest behavior;and the self-interest Behavior of large shareholders will significantly reduce the value of the company and damage the interests of investors.Finally,this article puts forward suggestions from the aspects of internal and external governance mechanisms,including: listed companies should introduce institutional investors and creditor balance mechanism to improve the internal corporate governance structure;the capital market in the external governance mechanism should play an active role in governance,and the regulatory authorities should strengthen supervision to improve the cost of violation.