Empirical Research On The Shareholders’ Veto In Listed Companies

The veto of shareholders’ meetings is the most direct embodiment of the interest conflict between the shareholders. The researcher use the empirical research method in this paper. A total of 600 listed companies are selected as the samples, which including 200 companies from the Main Board, 200 companies from the SME Board and the other 200 companies from the GEM. Based on the resolutions of shareholders’ meetings announcement which disclosured on the official information website, the data analysis focus on the veto in listed companies. The analysis of this research begins with the general presentation of the veto. Secondly, this paper study the time distribution of the veto. Thirdly, the relationship between the veto and ownership structure is discussed. Finally, the categories of resolutions which are easy to be rejected are listed and analyized in this paper.The finding of the empirical analysis indicates that the occurrence frequency of veto in the meetings is relatively low, the veto is most likely to happen in the Main Board listed companies. The data analysis also indicates that the number of occurences annually fluctuates up and down in a stable range, however, it has a slight tendency to rise in the future. The finding shows that the ownership structure and the ownership balance of the company are crusial factors which effect the veto. Under the circumstance of “One Big Share Alone”, voting advantage of the controlling shareholders make the veto difficult to exist. The more dispersive ownership structure is, the more powerful the ownership balance is, the easier to make the veto. Based on the data analysis, this research also indicates the resolutions that involved the interests of the shareholders are easy to be rejected, which including the resolutions of personnel decision, business activities and refunding. In addition, the exclusion of voting right in connected transactions is also a key factor which influences the veto.