Research On The Opportunistic Reduction Behavior Of Major Shareholders

With the lifting of the circulation ban of China’s stock market,many nontradable shareholders began to circulate shares in the stock market,and the stock trading in the secondary market became more free,and the number and amount of stock trading in the stock market began to increase.In recent years,the number and amount of shareholding reduction by major shareholders in China’s capital market have also continued to increase.Compared with other stakeholders,major shareholders can use their equity and information advantages to maximize their personal interests by trading the company’s shares through selective trading,selective disclosure of information,and complex opportunistic behavior.This behavior not only damages the company’s financial performance and the interests of small and medium-sized investors,but also has an impact on market stability.In2017,The China Securities Regulatory Commission revised and issued the Several Provisions on the Reduction of Shareholdings by Major Shareholders,Directors,Supervisors and Senior Executives of Listed Companies,which further regulated the reduction of shareholdings by major shareholders of listed companies.At that time,the violations of opportunistic reduction of shareholdings by major shareholders in the capital market were reduced to a certain extent,but with the more diversified and hidden means,the chaos of reduction of shareholdings by major shareholders began to emerge again.Based on the information asymmetry theory,signal transmission theory and control right income theory,this paper selects Jinlihua Power as a case to sort out the four major shareholder reduction events of Jinlihua Power from 2015 to 2017.This paper first identifies the opportunistic reduction of the majority shareholders of Jinhua TV,and then specifically analyzes the motivation and motivation of the opportunistic reduction of the majority shareholders of Jinhua TV,and then analyzes the means of the opportunistic reduction of the majority shareholders according to the behavior in the reduction process,and then reveals the impact of the opportunistic reduction of the majority shareholders through the analysis of the market response,and finally puts forward targeted suggestions from the perspective of regulators and corporate governance.The research conclusions of this paper are as follows: First,the shareholders of Jinlihua Radio and TV Company have obtained excess returns by reducing their holdings.According to this indicator,we can judge that they have opportunistic behavior in the process of reducing their holdings;2、 The main motivation for the opportunistic reduction of the shareholders of Jinlihua TV is the fluctuation of the external market and industry environment.The development of the single internal product in the future is less than expected.The main motivation is the high equity concentration and the imperfect regulatory market;3、 In order to cooperate with the reduction of shareholding,major shareholders seek to maximize their personal interests by reducing their shareholding through time-selective trading,selective disclosure of information and complex opportunistic behavior;4、 Opportunistic reduction of major shareholders will lead to the decline of enterprise share price and the damage of operation,and disrupt the stability and fairness of the capital market.Finally,this paper puts forward targeted suggestions from the perspective of regulators and corporate governance: from the perspective of regulators,it is necessary to establish a pre-disclosure system of multiple shareholding reduction methods,prevent major shareholders from exploiting institutional loopholes,be alert to the new shareholding reduction model of "equity pledge redemption-good news-emergency shareholding reduction",strengthen the dynamic supervision of big data on opportunistic shareholding reduction,and solve the problems of difficult evidence collection,slow process progress,and delayed punishment,In addition,we will increase the punishment of opportunistic reduction and increase the cost of violation.From the perspective of the company,it is necessary to optimize the equity structure to prevent the monopoly of one share,improve the governance and internal supervision mechanism,and protect the legitimate rights and interests of small and medium-sized investors.