The Impact Of Litigation Risk On Controlling Shareholders’ Incentive Of "Tunneling" Activities

With the increase of uncertain factors in my country’s economic development,the conflicts faced by market entities have increased.When conflicts are irreconcilable,litigation becomes one of the important ways to resolve conflicts.This makes litigation play an important role in resolving contradictions in economic life.Therefore,litigation has attracted more and more attention from theoretical circles.As an important part of market entities,listed companies have received more attention due to their public characteristics.In order to ensure a good governance effect,my country’s laws impose more restrictive or prohibitive provisions on the behavior of listed companies,especially the economic behavior between listed companies and their controlling shareholders,in order to prevent the controlling shareholders from "Tunneling" the listing.The company violates the interests of the company’s stakeholders and maintains the healthy and stable development of the market.Therefore,this article takes litigation and controlling shareholder "Tunneling" as the research object to study the influence of litigation on "Tunneling".Therefore,this article puts forward research hypotheses based on the concealment of the "tunneling" behavior and the controlling shareholder’s pursuit of the gains of control rights.At the same time,this paper selects A-share listed companies from 2015 to 2018 as the research sample,uses a multiple regression model to conduct research,and draws the following conclusions: litigation risk can strengthen the motivation of controlling shareholders to "Tunneling",and corporate internal governance cannot restrain litigation.The impact of risks on the "Tunneling" of controlling shareholders;in companies with violations of regulations,penalties for violations can restrain the impact of litigation risks on "Tunneling".Based on the above conclusions,this article puts forward policy recommendations from the legal system level,the intermediary level,and the entrepreneur level to protect the interests of small and medium shareholders,creditors,and company stakeholders.Of course,there are still many shortcomings in the research of this article,and it still needs to be improved and strengthened so as to comprehensively demonstrate the relationship between litigation risk and the "Tunneling" of controlling shareholders from all angles of litigation.