Research On Tunneling Behavior And Governance Of Large Shareholders And Senior Executives

In China’s capital market,it is a common phenomenon that the ownership structure of the company is concentrated.Compared with the other top 10 shareholders,the shareholding ratio of the top few shareholders is in a relatively controlled position.Among them,the top shareholders can take advantage of the convenience of their control rights to plunder the interests of small and medium-sized shareholders through some means to satisfy their private desires.Large shareholders often form interest alliances with senior executives to achieve hollowing out and obtain excess profits.The problem of large shareholders and executives colluding to eviscerate listed companies needs to be solved,because it not only undermines the interests of investors who support and trust these listed companies,but also hampers the healthy development of capital markets.Therefore,the study of the characteristics of interest game between large shareholders and senior executives and the specific forms of collusion tunneling can effectively prevent such problems and further improve corporate governance direction.Firstly,this paper selects a typical case of large shareholders and senior executives conspiring to eviscerate in the capital market from 20212012 to 2021.Based on the perspective of conspiring to eviscerate,it is found that the evisceration method has two characteristics:non-equity and equity,therefore,it is classified into two categories:equity-way collusion and non-equity-way collusion,and according to the motives of collusion,they are:The pursuit of Control Gains,the difficulties of large shareholders’self-interest groups,and the transfer of high-quality resources;Collusive Tunneling:non-equity way(long-term occupation of funds,unfair related transactions,non-compliance guarantee)and equity way(using "High transfer" to reduce holdings,targeted additional issuance,mergers and acquisitions,dividend policy);The economic consequences of collusion tunneling:it reduces the profitability and corporate value of listed companies,damages the interests of minority shareholders and creditors,hinders the healthy development of the capital market,and forms a theoretical framework for research.Secondly,this paper takes HD AND TG as two complementary tunneling methods,and discusses the previous viewpoints,focusing on the major shareholders after they have obtained control of the listed company,because the pursuit of control income,transfer of high-quality resources and other motivations,through equity(such as cash),non-equity(such as non-operating funds occupied,related transactions,etc.)collusive behavior.HD conspired to eviscerate by non-equity way,then caused the financial situation to deteriorate and then caused the stock price to fall "Indirectly"to other small and medium-sized shareholders,after TG realized the evisceration by equity way,the stock price will be quickly affected,the small and medium-sized shareholders’holding behavior will also change quickly according to the"Favorable"appearance,and the impact on the stock price after the hollowing out is also direct,which will more "Directly"affect the small and medium-sized shareholders’interests,and both will affect the healthy development of the capital market.Finally,the paper draws a conclusion:large shareholders and executives will choose stock or non-stock tunneling methods to carry out tunneling based on different motivation needs,it reduces the profitability and corporate value of listed companies,damages the interests of minority shareholders and creditors,and hinders the healthy development of the capital market.In order to avoid such incidents,the following governance mechanisms can be adopted:a sound legal and business environment in advance,an efficient reputation mechanism,the establishment of a committee of small and medium investors,and a supervisory mechanism for external professional managers to raise the cost of collusion,in doing so,control mechanisms have been formed,such as perfecting corporate governance,rationally decentralizing equity to form equity checks and balances,strengthening internal control construction,strengthening incentives for senior management,strengthening information disclosure and reducing asymmetry,afterwards,the mechanism of punishment and compensation should be formed to increase the degree of punishment and improve the quality of audit.The main contributions of this paper are as follows:(1)this paper selects two complementary tunneling cases to analyze,and increases the amount of research related to tunneling by major shareholders and senior executives,this paper summarizes the motivation,the conventional means and the economic consequences of their tunneling behavior,and puts forward a series of targeted governance mechanisms.In order to effectively prevent this collusive behavior to build a theoretical support;(2)according to the characteristics of the case summary can be formed for non-equity and equity two different types of tunneling prevention in advance,recommendations from different perspectives can also be used as a reference for in-process control and ex post supervision and prosecution.It has certain practical significance and academic value.