Research On Large Shareholders’ Tunneling Behavior From The Perspective Of Investor Protection

In recent years,with the development of the stock market,there have been many cases of large shareholder tunneling.Although China’s laws are improving day by day,it has not changed the weak position of small and medium investors in China’s listed companies.Combining with the goodwill thunder in China recently,large shareholders’ tunneling behavior has become more and more unscrupulous.In oder to solve the problems,the "New Securities Law" was revised in December 2019 to detail provisions on investor protection and information disclosure.ST Zhongnan lurked the crisis of tunneling major shareholders as early as 2015.Since the company’s exposure of violations in October 2018,the Securities and Futures Commission has frequently asked questions.Observing the details of tunneling,the controlling shareholder frequently pledged and reduced shareholdings,transferred interests in related transactions of mergers and acquisitions,occupied funds for non-operating purposes,violated external guarantees in violation of regulations,unapproved issuance of commercial tickets,and huge amounts of goodwill impairment covering the losses.In the end,ST Zhongnan’s stock price fell down to the deep,the excess return rate performed poorly,the company’s poor performance,unsustainable operation,and the actual controller brought a series of economic consequences.This article uses case analysis and event research methods combined with the background of China’s "New Securities Law" to deeply analyze the economic consequences and warning effects of ST Zhongnan major shareholders’ tunneling behavior.Through a detailed analysis of this case,this paper found that the means of tunneling by large shareholders are various and relatively concealed.So strengthening information disclosure,improving internal control of the company,improving the participation of small and medium-sized investors in decision-making,clarifying the division of responsibilities of various subjects in violations,and warning investors aware of tunneling signals and consummating market supervision are particularly important.This article combines the promulgation of the "New Securities Law" to analyze the effectiveness of its protection of investors,and finds that it can suppress the tunneling behavior of large shareholders and rationally regulate the various behaviors of the capital market.It has a significant impact and positive effects on investor protection and the long-term stable development of the capital market.Finally,countermeasures and suggestions are proposed from the aspects of information disclosure,company internal governance,and external supervision.