A Study On The Conversion Of Propping And Tunneling By Ultimate Controllers To Family Listed Companies

In recent years,the academic research scope of corporate governance has shifted from the first type of agency problem to the second type of agency problem between the ultimate controller and small and medium shareholders.There are many literatures on the second type of agency issues at home and abroad.Throughout the literature,the research content of the domestic and foreign literatures mainly involves the ultimate controller's "tunneling" behavior and the way of "tunneling",or the influence of the company's value,and less about the ultimate supporter's “propping” behavior and the impact of the “propping” behavior.Through more and more researches on the behavior of the ultimate controller of the company,scholars have found that there is a coexistence between the "tunneling" and "propping" behavior of the ultimate controller.This article mainly studies the two kinds of behaviors of the ultimate controller's "hollow-out" and "propping".Based on the principal-agent theory,transaction cost theory,control right private income theory,and information asymmetry theory,Chengdu Tianxiang Environment Co.,Ltd.(Hereinafter referred to as "Tianxiang Environment")as an example.Since the company went public in 2014,the ultimate shareholder Deng Qinhua family has provided funds to the listed company to propping the listed company's industrial transformation through mergers and acquisitions.However,when the Deng Qinhua family was in financial trouble in 2018,their behavior turned to occupying the rights of listed companies through fund occupation and illegal guarantees,which eventually led to the default of the listed company's debts and faced the risk of bankruptcy.There was "propping" behavior first,and then "empty" "behavior.This article theoretically and practically analyzes the "tunneling" and "propping" behaviors of the ultimate controller of Tianxiang Environment,as well as the causes and economic consequences of these two behaviors,and finally puts forward based on the research conclusions and the corporate governance problems of Tianxiang Environment.Some reference suggestions help small and medium shareholders recognize the ultimate controller's "tunneling" and "propping" behaviors,in order to enhance the self-protection awareness of small and medium shareholders,and enhance corporate governance.At present,China's capital market is in a critical period of reform from the approval system to the registration system.Under the characteristics of the concentration of equity in China's capital market,how to regulate the relationship between the ultimate controller and the listed company,to contain the ultimate controller from hollowing out the listed company,and to protect the rights and interests of small and medium shareholders have strong practical significance.This article puts forward policy recommendations from three dimensions of investors,corporate governance and securities supervision,which has certain practical significance.