Study On The Motivation And Economic Consequences Of The Reduction Of Major Shareholders

In recent years,the reduction scale of major shareholders in China has been expanding,and the illegal reduction and cash out and frequent reduction have gradually increased,which has damaged the interests of minority shareholders.In order to regulate the reduction of major shareholders and protect the interests of minority shareholders,since 2015,the CSRC and relevant departments have continuously issued relevant laws and regulations to regulate the reduction of major shareholders,but the problem of reduction has not been effectively solved.Therefore,in order to regulate the reduction of major shareholders and protect the interests of minority shareholders,it is still necessary to further understand the motivation and economic consequences of the continuous and frequent reduction of major shareholders.This paper takes the continuous reduction of Cixing’s major shareholders as the case study object,uses the case study method and normative research method,and deeply analyzes the motivation,market response and specific impact on the company and minority shareholders of Cixing’s major shareholders based on relevant theories such as information asymmetry and control income.The main conclusions are as follows: first,the main motivation for the continuous reduction of Cixing’s major shareholders is to avoid risks,alleviate capital pressure,obtain high cash out income and pave the way for the transfer of control,the main motivation for its continuous reduction is cash out to obtain funds and income;When pricing the reduction transaction,the major shareholders will quantify the loss of control and add it to the transaction price.Second,the reduction of Cixing’s major shareholders mainly brings negative market reaction or reduced income in a short time,and the impact of different reduction environments is different.When there is good news or the market situation rises sharply,the negative effect brought by the reduction of major shareholders is smaller than the normal reduction,and even drives the growth of income;There are bad news.For example,when the reduction may lead to the change of ownership of the company’s major shareholders,the negative reaction will further expand.Third,the reduction of Cixing’s major shareholders endangers the company’s long-term operation and damages the long-term and short-term economic interests of minority shareholders.Therefore,it is found that the continuous reduction of major shareholders is not conducive to the long-term development of the company,and will cause direct economic losses to the market and minority shareholders.In order to further maintain market stability and protect the interests of minority shareholders,the regulatory authorities still need to further strengthen the disclosure of major shareholders’ holdings reduction information;Listed companies need to further improve and strengthen corporate governance,so that minority shareholders can participate in the board of directors and reduce agency costs;Minority shareholders still need to continue to strengthen their information acquisition ability,professional analysis ability and risk awareness,so as to protect their own rights and interests.