Study On Major Shareholders’ Tunneling Of Sichuanjinding

Because of the unique economic development path, most of the listed companies on the stock market is restructuring state-owned enterprises, pyramid holdings, cross-holdings are quite common in this type of enterprise, controlling shareholders also took advantage of this shareholdings has reached the control is greater than the cash flow rights. In this case, a conflict of interest between corporate shareholders and minority shareholders is the main agency conflict, in which the major shareholders may use their control through a variety of ways to harm minority shareholders’ interests. China’s capital market after ten years of development has begun to take shape, the listed company has developed into a source of community and capital market investment value of China’s economic operation in the most development advantage. However, the current situation of China’s listed companies’ stock split still exists. There is also lack of proper mechanisms to protect the interests of small shareholders, major shareholders in fact bound by acts of the market mechanism has not really set up so that conflicts of interest between shareholders and minority shareholders is still inevitable, in recent years also many scandals broke out. By analyzing the case of Sichuanjinding tunneled from major shareholder Hualun Group, Hollowed out the underlying causes of mining success. The reason can be summarized as the following three points: 1, Ultra control that resulted tunneling; 2, the opportunity cost of the interests of major shareholder led tunneling; 3, the legal system is not perfect and lax law enforcement lead to a large shareholders tunneled. After the scandal exposed, the former major shareholder of Sichuanjinding exit, the new major shareholder Hailiang entered. This article compare the situation, the results showed that the improvement of corporate governance structure and the difference of major shareholders’ self-discipline is indeed inextricably linked with the tunneling. Sichuanjinding made some improvements after being tunneled, these positive changes avoid further tunneling of a new major shareholder. In the end of this article, Proposed for the prevention of tunneling by major shareholders.