Research On Pseudo-market Value Management Behavior Of Listed Companies From The Perspective Of Tunneling Of Major Shareholders

In 2005,the reform of non-tradable shares was implemented,and China’s capital market entered a new age.Important changes have taken place in the way of insiders making profits in listed companies,including that a large number of non-tradable shares held by controlling shareholders and individuals of directors and supervisors have triggered a "reduction tide" in the secondary market,which has become an important way for investors to obtain interests.In 2014,the proposal of the new "Nine Laws" encouraged listed companies to carry out active theoretical study and practice of market value management.When the concept of market value management in the capital market is developing steadily and improving,under the cloak of market value management,it is actually the manipulation of pseudo-market value management that disrupts its pace.The China Securities Regulatory Commission has criticized this "pseudo-market value management" several times,holding that such behavior,which is essentially to manipulate the stock market and disturb the market order,will be severely punished once it is verified.The promulgation of the new Securities Law in 2020 has systematically improved the basic systems of the securities market,such as corporate financing,mergers and acquisitions,information disclosure,and protection of minority shareholders,making up for the shortcomings of low cost of illegal activities and the inability of disciplinary measures to play their deterrent role in China.However,in the long run,some listed companies still violate the original intention of market value management and use pseudo-market value management to raise stock prices and "tunneling" listed companies,which causes great harm to the interests of small and medium investors and is not conducive to the stable and sustainable development of the capital market.Based on the perspective of major shareholder tunneling,this study takes Lianchuang as a case company,firstly evaluates and analyzes its market value management performance from 2016 to 2021,combined with its market value management index not improving but declining and the hollowing practices of major shareholders during this period.It holds that the "market value management" of Lianchuang Stock during this period is likely to be a pseudo-market value management behavior for the purpose of tunneling,and deduces the motivation of Lianchuang Stock’s pseudo-market value management based on this.Secondly,this paper analyzes the possible "mode" of pseudo-market value management cycle of Lianchuang Stock,and sorts out the logical relationship between its pseudo-market value management behavior,major shareholders’ tunneling methods and their "control rights" maintenance methods.Finally,the conclusions of this study are as follows:(1)listed companies may adopt M&A,earnings management,information disclosure and other pseudo-" market value management " to cater to the " tunneling behavior " of major shareholders;(2)Increasing market value through pseudo-market value management can bring "benefits" to listed companies and major shareholders in the short term,but in the long term,it is extremely harmful to listed companies;(3)Insiders such as controlling shareholders of listed companies artificially make continuous profits,or adopt the "pseudo-market value management cycle" mode.Controlling shareholders and other insiders are commonly used to "tunneling" listed companies by means of equity pledge,share reduction and related party transactions.On the premise that the controlling shareholders continue to seek private interests,how to maintain their control rights is the primary risk considered by the controlling shareholders in "tunneling."The innovation of this study lies in the comprehensive analysis of the pseudo-market value management behavior,the hollowing out of major shareholders and the means of maintaining "control",and refining a "model" of pseudo-market value management cycle of listed companies.The circular "model" is a deepening and expansion of previous research,enriching the research perspectives and methods of this kind of research,hoping to provide empirical evidence for relevant departments to implement accurate and effective supervision on identifying the circular arbitrage behavior of listed companies using the "model" of pseudo-market value management.