Research On Market Manipulation Behavior Based On The Perspective Of Major Shareholders’ Shareholding Reduction

The report of the 20 th Party Congress pointed out that "improve the function of capital market and increase the proportion of direct financing",further indicating the direction of optimizing the financing structure and enhancing the capacity of financial services for the real economy.In recent years,with the launch of the Science and Technology Innovation Board,the reform of the Growth Enterprise Market,the establishment of the Beijing Stock Exchange,and the full implementation of the registration system,China’s capital market reform has continued to advance in depth.However,China’s capital market has been established for a relatively short period of time,and the imperfect market structure and unsound systems and regulations have allowed opportunities for illegal and unlawful acts to take advantage of.Despite the promulgation of relevant ordinances by the Securities Regulatory Commission,the practice of major shareholders infringing on the rights and interests of small and medium-sized shareholders through securities market manipulation in the process of reducing their holdings to reap excessive returns has not been curbed.In addition,such manipulation is complex and covert,which are difficult to be detected and identified in advance.To better protect the interests of minority shareholders and promote the healthy development of China’s capital market,this paper takes Jin Yun Laser as a case study to deeply investigate the market manipulation behaviors from the perspective of major shareholders’ shareholding reduction.Guided by the efficient market hypothesis,noisy trading theory,fraud triangle theory and information asymmetry theory,this paper integrates case study method,empirical analysis,and event study method to investigate market manipulation from the perspective of large shareholders’ shareholding reduction.This paper firstly compares the domestic and foreign scholars’ literature on the motives,means,economic consequences and regulation related to major shareholders’ shareholding reduction behaviors and market manipulation behaviors.Then on the basis of the literature review,the current situation analysis section summarizes the market manipulation cases disclosed by the SRC from 2016 to 2022 from the perspective of major shareholder`s shareholding reduction and concludes three characteristics of the current market manipulation behaviors under the perspective of large shareholders’ shareholding reduction.And then,in the case introduction section,the basic situation of Golden Laser and the complete process of the major shareholders’ shareholding reduction are introduced,and in the case analysis section,the specific means of market manipulation by major shareholders of Golden Laser and the consequences of the exposure of the act are analyzed from internal and external factors.Firstly,the internal factors of the company are used to analyze the prerequisites for market manipulation;secondly,the event study method is used to analyze the impact of frequent positive information disclosure by major shareholders on the company’s share price,and the empirical analysis method is used to confirm the existence of secondary market manipulation;and the financial index analysis method is used to analyze the consequences of the exposure of manipulation.Subsequently,three conclusions were drawn: firstly,as the governance structure and regulation are still imperfect,large shareholders will raise the share price by manipulating the share price and make a move to complete the reduction at the high level of the share price to maximize their own profits;secondly,the various means of market manipulation by large shareholders will mislead small and medium-sized investors and harm their interests;thirdly,the market manipulation by large shareholders may bring gains in the short term but is detrimental to corporate Third,market manipulation by major shareholders may bring short-term gains but is detrimental to the financing and development of enterprises in the long run.Finally,the paper proposes countermeasures from the perspectives of enterprises themselves,regulators,and investors themselves,including improving corporate governance structure,strengthening regulation and education,and maintaining rational thinking.In this paper,the market manipulation behavior under the perspective of large shareholders’ shareholding reduction is studied,and the research results have theoretical and practical significance,which are valuable for safeguarding the legitimate rights and interests of small and medium shareholders and the long-term healthy development of the stock market.