Research On The Problem Of Controlling Shareholders’ Benefit Encroachment And Prevention Mechanism

In our capital market,all kinds of violations of common behavior.For example,the controlling shareholder is easy to choose to encroach on the listed company under the temptation of interests.The complex governance structure and incomplete supervision system of listed companies provide favorable conditions for controlling shareholders.However,our capital market is in a period of rapid development,in order to regulate the market order,relevant departments have been committed to improving the regulations,but at the same time,the means of major shareholders are also constantly updating,becoming more hidden and difficult to detect.Therefore,the author believes that it is necessary to conduct an in-depth study on the problem of controlling shareholders’ interest encroachment,explore the internal mechanism and prevention mechanism,so as to effectively improve the governance efficiency of listed companies,enhance the legal protection of minority shareholders’ rights and interests,and further alleviate the second type of agency problems,maintain the order of the domestic capital market and promote its stable development.Liquor enterprises are typical to A certain extent.Among the 19 A-share listed companies,12 are state-owned holdings,and their main products are highly marketed.Liquor enterprises actively participate in equity reform,and their equity concentration is generally high.In this paper,Shede Spirits Co.,Ltd,a state-owned liquor enterprise,is selected as the research object,and the incident of its self-disclosure of the controlling shareholder’s interest encroachment is studied,and the motivation,method,cause and influence of the controlling shareholder’s interest encroachment are discussed,which has certain practical significance.First of all,based on the principal-agent theory,information asymmetry theory and tunnel excavation theory,this paper discusses the theoretical basis of profit encroachment by the controlling shareholders of listed companies.Secondly,by combing the basic situation of Shedi Wine Industry and its major shareholders before and after the event,using financial analysis method,event study method and other methods to compare the business performance of listed companies before and after the benefit encroachment,and carry out in-depth analysis of the impact of the benefit encroachment event.Finally,combined with the above analysis,a governance mechanism is constructed to prevent the hollowing out behavior of major shareholders from two levels of enterprise internal and market supervision.Through research,it is found that the financing constraints brought by the equity pledge of the controlling shareholders and their own debt crisis are the motive sources of their interest encroachment.The unreasonable internal ownership structure,governance structure and information disclosure,as well as the inadequate supervision of external regulatory departments and third-party organizations,make the controlling shareholder Tianyang Holdings carry out its holloway through non-operational capital occupation,reducing dividend distribution and cash dividends,adjusting executive salaries for personal gain and other ways.Such hollowing will bring a series of negative impacts on the performance,value and future development of listed companies.Therefore,this paper puts forward targeted suggestions,namely: on the one hand,listed companies need to improve the equity checks and balances mechanism,strengthen internal control,enhance management constraints on the board of directors,ensure the independence of the board of supervisors to prevent the controlling shareholders’ interest encroachment.On the other hand,in the capital market,it is suggested that relevant departments should implement the litigation system of minority shareholders and the information disclosure system as soon as possible,accelerate the optimization of regulatory measures,and improve the punishment of violations.