Research On Large Shareholders’ Tunneling Behavior And Its Prevention

With the development of the real economy and the financial industry,more enterprises have been successfully listed and the major shareholders’ tunneling behavior keeps happening,which not only damages the interests of the company and minority shareholders,but also is not conducive to the good operation of the capital market.At the same time,most of the studies on the embezzlement of major shareholders’ interests are based on the analysis of large samples and conducted from the perspective of empirical studies.Moreover,even if there are some case studies,most of them are based on the analysis of the economic consequences or focus on preventive recommendations in terms of internal governance mechanisms.Few scholars conduct in-depth analysis on the embezzlement of major shareholders from the perspective of the imbalance of ownership structure and the defects of the internal and external governance structure of the company.In this context,based on principal-agent theory,information asymmetry theory and control right self-interest theory,this paper uses literature research method,case analysis method,comparative analysis method and qualitative and quantitative combination analysis method to study the benefit embezzlement of major shareholders of ST Soling.The major shareholders of ST Soling embedded the assets of listed companies by providing illegal guarantees for other companies,transferring assets through fictitious transactions,pledging a high proportion of equity and unreasonable compensation system.On this basis,this paper analyzes the reasons for the benefit encroachment of major shareholders of ST Soling.In terms of governance institutions,ST Soling has problems such as highly centralized ownership structure,close relationship between board members,and integration of the two posts of chairman and general manager.In the internal governance mechanism,ST Soling’s independent directors are virtually nonexistent,the Board of Supervisors fails to play a supervisory role,and the internal audit department does nothing.In terms of external governance mechanism,the investigation of CSRC is lagging behind and the punishment is relatively light.Although the supervision of Shenzhen Stock Exchange is timely,its punishment is not strong enough.Accounting firms are not being diligent.At the same time,media regulation is not in place.Based on the problems exposed in the internal and external governance of ST Soling,practical suggestions are put forward from the corporate governance structure and internal and external governance mechanism.In terms of corporate governance structure,ST Soling can optimize the shareholding structure by introducing institutional investors.It can improve the structure of the board of directors by increasing the participation of minority shareholders in the general meeting,establishing the board of director assessment mechanism and hiring professional managers.In terms of internal governance mechanism,it can strengthen the role of independent directors through the employment mechanism of independent directors,compensation incentive system of independent directors and credit archives.ST Soling shall strengthen the supervision of the Board of Supervisors through diversified members and reward and punishment mechanism.ST Soling shall strengthen the internal control construction of the company from the aspects of risk assessment,control activities,information and communication and supervision.In terms of external governance mechanism,CSRC and stock exchanges can improve regulatory measures by increasing punishment,updating technology and strengthening information disclosure standards.Accounting firms should improve the audit quality from the aspects of audit procedures,independence and professional behavior.The CSRC can strengthen supervision by increasing punishment,regularly sampling and publicizing audit papers,and establishing credit files.The media should also bring in financial talents and establish two-way incentives to strengthen supervision.In addition,the government should improve the minority shareholder litigation system.