Research On Tunneling Economic Consequences Of Major Shareholders Of Kedy Under Executive Family

With the continuous development of Chinese capital market,more and more companies choose to go public to raise funds to help their further development.However,due to the late development of corporate governance system in China,many listed companies have a dominant shareholding structure.At the same time,the control right of many private listed companies is controlled by the founder’s family,and the internal executives of the company are obviously family.Although family members working in companies can improve efficiency to a certain extent,it is also easy to appear mutual protection behavior.In recent years,there have been numerous cases of tunneling by major shareholders,who have greater power in family businesses,using various means and relationships to tunnel into the business.This kind of behavior is extremely harmful to the enterprise and the overall market environment,and is very detrimental to its development.Therefore,how to prevent the tunneling behavior of major shareholders under the patriarchal management has become an urgent problem to be solved.This paper selects Kedy,who has typical executive family characteristics,as the research object.Firstly,on the basis of literature research,this paper theoretically analyzes the tunneling behavior of major shareholders under the patriarchal management.Secondly,from the process of tunnel excavation,analysis of its major shareholders of the motivation,means and causes of tunnel excavation,so as to analyze the successful realization of Kedy major shareholders of the tunnel excavation of a variety of factors.Then it deeply analyzes the economic consequences of tunneling by Kedy’s major shareholders: First,the tunnel excavation of Cody Dairy’s major shareholders brings huge negative impact on the listed company,and evaluates the impact on the company’s value by calculating the economic added value;The influence on the company’s financial performance was analyzed from four aspects: solvency,profitability,operating ability and development ability.The factor analysis method was used to score the company’s financial performance.Combined with the previous analysis,the F score model is used to evaluate the financial risk of except Cody Dairy.Second,tunnel excavation also brings relatively serious negative impact on the minority shareholders and the capital market.Tunnel excavation damages the investment income of minority shareholders and increases the investment risk.It is concluded that the normal order of the capital market is affected through the analysis of event study method.Finally,through the analysis of the tunnel excavation event of Kedy Dairy’s major shareholder,three enlightenments are obtained: first,the enlightenment to the company,to improve the ownership structure,improve the internal governance;The second is the inspiration to the regulatory authorities,strengthen the supervision role of the third party institutions,increase the punishment,improve the information disclosure system;Third,the revelation to the public media,exert the supervisory effect of the media.This can be used as a reference for other enterprises to prevent tunneling of major shareholders and improve the supervision of relevant departments.