Research On The Protection Of Small And Medium Investors’ Rights And Interests Under Ponzi Scheme Dividend

Dividend policy is not only related to the interests of shareholders,but also one of the means for listed companies to conduct financial management.From the establishment of the securities market in 1990 to 2000,China’s Securities Regulatory Commission did not impose strict requirements on the dividend policy of listed companies.During this period,China’s listed companies are generally not willing to participate in dividends,even if some companies conduct cash dividends,their dividend payout rate is also low.In order to change this situation,the China Securities Regulatory Commission has issued a series of measures to encourage listed companies to participate in dividends,such as linking refinancing eligibility and dividend amount.These policies have indeed led to a significant increase in the number of companies paying cash,but there has also been a phenomenon of high cash dividends,and some companies have even conducted Ponzi scheme dividend.Ponzi dividend refers to the behavior of forcibly distributing dividends when an enterprise does not have the ability to do so.A company with Ponzi scheme dividend will not only make its capital flow insufficient to support its future development,but also harm the rights and interests of small and mediumsized investors.Small and medium-sized investors are one of the important components of the capital market in China.However,due to their low shareholding ratio in the company,relatively dispersed ownership,and low level of participation in the operational decisionmaking of listed companies,major shareholders of the company have opportunity to make decisions that are beneficial to themselves and infringe on the rights and interests of small and medium-sized investors.Based on the above background,this article conducts a study of Focus Technology Co.,Ltd.,which has been paying high dividends for 13 consecutive years from 2009 to 2021,to analyze the causes and consequences of its Ponzi scheme dividend,and focuses on the impact on small and medium-sized investors.It has certain representativeness and research value.This article uses the literature analysis method and case analysis method to study the technology dividend policy and determine whether it carries out Ponzi scheme dividend.On this basis,the research focuses on the motivation of Ponzi scheme dividend conducted by Focus Technology,further judging the specific aspects of the damage caused by Ponzi scheme dividend to small and medium-sized investors,and analyzing the reasons.And put forward suggestions for preventing Ponzi scheme dividend and protecting the rights and interests of small and medium-sized investors in the future.First of all,based on the collection and collation of a large number of documents and materials,this thesis sorts out the relevant research on cash dividend policy,Ponzi scheme dividend,and the protection of small and medium-sized investors,and makes a literature review of the relevant literature.Secondly,it discusses the definition of Ponzi scheme dividend and small and medium-sized investors in this thesis,and introduces two methods to distinguish Ponzi scheme dividend.And this thesis combs the manifestations of Ponzi scheme dividend damage to the rights and interests of small and medium-sized investors,as well as the status quo of protection of the rights and interests of small and medium-sized investors.In addition,this thesis also clarifies the theoretical basis of Ponzi scheme dividend and the protection of the rights and interests of small and medium-sized investors.Thirdly,it analyzes the basic situation,equity structure,and dividend policy of Focus Technology,determines whether Focus Technology will receive a Ponzi scheme dividend,and analyzes the reasons for the Ponzi scheme dividend and the impact of the Ponzi scheme dividend on the rights and interests of small and medium-sized investors based on the above situation.Finally,from the perspective of external supervision,corporate governance structure,and small and medium-sized investors themselves,this thesis analyzes the causes of the damage to the rights and interests of small and medium-sized investors caused by the Focus Technology Ponzi scheme dividend,and proposes targeted prevention suggestions based on the analyzed reasons.The most fundamental reason for the occurrence of Ponzi scheme dividend behavior in Focus Technology is the imbalance in the ownership structure.Because when the controlling shareholder holds a majority of the shares,the controlling shareholder controls almost all aspects of the company’s operations,controlling the shareholders’ meeting and the board of directors.In company management decisions,small and medium-sized investors have almost no voice,and large shareholders will implement dividend policies that are biased towards their own,resulting in Ponzi scheme dividend behavior.This will affect the development ability of the enterprise,thereby affecting the stock price and value of the enterprise,and ultimately causing damage to the rights and interests of small and medium-sized shareholders.Therefore,in order to avoid Ponzi scheme dividend and protect the rights and interests of small and medium-sized investors,it is necessary to work together from three aspects:external supervision,corporate governance structure,and small and medium-sized investors themselves,in order to protect the rights and interests of small and medium-sized investors.From the perspective of external supervision,it is necessary to improve laws and regulations for the protection of small and medium-sized investors,refine dividend requirements,and improve financing policies;From the perspective of enterprises,it is necessary to optimize their own equity structure,improve the director nomination mechanism,strengthen the supervisory function of the board of supervisors,and form effective internal supervision;From the perspective of small and medium-sized investors,it is necessary to strengthen education on investment and financial management for small and medium-sized investors,and improve their scientific decision-making ability and risk prevention awareness.Only by achieving the above three points can we regulate the Ponzi scheme dividend behavior and protect the rights and interests of small and medium-sized investors.