Study On The Tunneling Behavior Of Major Shareholders Of ZhenXing Biochemical Co.Ltd

With the development and perfection of capital market,more and more companies choose to go public in order to make full use of capital market resources.However,most listed companies are restructured from state-owned enterprises.These listed companies' ownership structure and corporate governance structure is not perfect.There are high ownership concentration and important members of the company cross-serving.The existence of these factors creates the possibility for the occurrence of tunneling behavior of large shareholders,which makes the agency conflict between large shareholders and small shareholders more and more intense.In order to protect the interests of minority shareholders and maintain the healthy development of the capital market,the relevant regulatory authorities continue to introduce new regulatory measures and regulations,which to some extent regulate the operation of listed companies.However,due to the fact that the market mechanism which restricts the behavior of the large shareholders has not been established yet,the tunneling of the listed companies by the large shareholders often occurs,which seriously affects the orderly development of the capital market.Therefore,it is of great theoretical significance to analyze the causes,ways and effects of tunneling behavior of major shareholders to prevent tunneling behavior of major shareholders and protect the rights and interests of minority shareholders.After consulting the domestic and foreign literature,this paper analyzes the reasons,ways and effects of revitalizing the tunneling behavior of biochemical major shareholders based on Equity balance theory,Principal-agent theory and Asymmetric information theory.In particular,there are four ways to the tunneling behavior of ZhenXing biochemical major shareholders,including related party transactions,asset restructuring,non-operating capital occupation and illegal guarantee.The main reasons for the tunneling behavior of major shareholders are unreasonable ownership structure and internal governance structure of the company.The specific performance is relatively concentrated equity,low equity checks and balances,the board of directors and managers under the control of major shareholders and the board of supervisors no performing their due supervisory duties.In addition,the imperfection of corporate external governance mechanism is also another reason for the occurrence oftunneling behavior of major shareholders,such as insufficient external supervision and imperfect relevant laws and regulations.The impact of tunneling behavior of large shareholders mainly affects the growth of net profit,brings higher financial risk to the company,and makes the stock price continue to decline,which seriously affects the development of the company and infringes upon the interests of minority shareholder.Finally,this article from the optimization of the company's ownership structure and internal governance structure,while strengthening external supervision and improving the relevant legal system of four aspects to prevent the tunneling behavior of large shareholders of ZhenXing Biochemical Co.Ltd,in order to reduce the possibility of tunneling behavior of large shareholders to a certain extent.