Judicial Interpretation Of Shareholder’s Derivative And Tunneling Of Controlling Shareholders

Large shareholders’ tunneling phenomenon under corporate governance has been a hot issue of global concern.In the period of economic transformation,and also "one share jumbo" phenomenon is particularly serious in China,large shareholders’ tunneling is a focal problem of management practice.Facts have proved that large shareholders of listing Company often use their strong control ability to run the management decision in their own interests and then they can tunnel the firms and damage the interests of minority shareholders.Therefore,for the academic and practical circles,how to effectively supervise the "tunneling" of the major shareholders and protect the interests of the minority shareholders and the company has become a hot topic of corporate governance.From the angle of judicial interpretation of shareholder’s derivative action legal system,this paper studies how to restrain the large shareholder’s "tunneling" behavior.Therefore,through theoretical analysis and empirical test,this paper analyzes the 2017 shareholder derivative legal system of judicial interpretation of the implementation of "tunneling" behavior of major shareholders.A series of corporate governance indicators are selected based on the research of Chinese listed company Governance Index and Bai Zhongen(2005).This paper constructs a corporate governance index to measure the corporate governance level by Principal Component Analysis,further discusses the role of the intermediary variables of different corporate governance levels in the process of impact,and establishes a model test.Based on the A-shares of Shanghai and Shenzhen stock markets from 2015 to 2018,this paper tests the hypothesis by taking the amount of related party transactions as the measurement index of the tunneling behavior of the major shareholders,and puts forward corresponding countermeasures and suggestions according to the empirical results.The results of this study show that: First,the implementation of judicial interpretation of shareholder’s Derivative Litigation law system shows a negative correlation with the "tunneling" behavior of major shareholders.the judicial interpretation of shareholder’s Derivative Litigation System can restrain the "tunneling" behavior of large shareholders;Second,with the separation of control right and cash flow right being high,the judicial interpretation of shareholder’s derivative action legal system in 2017 has a more significant restraining effect on the "tunneling" behavior of large shareholders;Third,This paper uses principal component analysis to construct corporate governance index,and shows that the judicialinterpretation of the legal system of shareholder derivative litigation in 2017 inhibits the "tunneling" behavior of large shareholders by improving corporate governance.