The Study On The Pretection Of Small And Medium-sized Shareholders's Rights

Since China's securities market has been a current global mechanism, securities market developed rapidly and achieved notable success in the development of scale .However, small and medium shareholders rights are frequently infringed in the stock market, so the small and medium shareholders have not enough confidence with the stock market. Therefore, the protection of small and medium shareholders rights under the control of large shareholders are studied in this article.Several concepts are defined in this paper. Then the agent relationship between large shareholders and small shareholders is analyzed on the base of the principal-agent theory. Secondly the cause and methods of a large shareholder against the interests of small shareholders are investigated by the analysis of a case and the main reason of the major shareholders against the small and medium shareholders that voting rights separate with cash flow rights is found, while the game theory is used to find the cause of the major shareholders against the small shareholders. Thirdly a mathematical model is built by using regression analysis of the major shareholders against the interests of small shareholders to conduct a quantitative study. With an increase in the proportion of large stockholder's shareholding, the large stockholders will be more motivated against the interests of small shareholders under the condition of stockholder's concentration in listed companies. With an increase in the size of listed companies, more information will be disclosured, so the large shareholders infringe less interests of small and mediun shareholders. But the increase in the debt of listed companies can't prevent violations of the large shareholders. Financial condition and circulations of shares have no significant statistical relationships with violations of the large shareholders. Finally, on the biases of mathematical model, some advice which can be used to protect small and medium shareholders rights on improving internal governance mechanisms, external governance mechanisms and a sound system is given.