The Analysis Of Holdings Of Controlling Shareholders Of Tianlong Corporation

The successful completion of equity division reform is a new milestone in China’s stock market,which means that China’s stock market has officially entered the new stage of full circulation.Shares that had previously been unable to circulate freely in the market because of restrictions were allowed to circulate in the stock market in violation of previous regulations.This suggests that the non-tradable shares in the securities market of our country preliminary solved problem,but it also provides a new way of profit for the large shareholders which means to sell off their own company’s shares to obtain high yield.The major shareholders of the company are the insiders of the company.Based on this unique identity,they can understand all kinds of information of the company more comprehensively and systematically than the majority of small and medium-sized shareholders.As a result,they trends to increase or reduce the company’s shares held on the basis of the relevant information about the company’s actual situation they collected such as the company’s financial position,operating results,the valuation results and expected future development prospect.The decision of the majority shareholder to transfer the number of shares held by the company is not only detrimental to the equity and stable development of the securities market,but also affects the company that is reduced.The shareholder’s decision to reduce the shareholder release to the market and investors a negative signal of the company’s poor operating conditions and expected future earnings decline,which in turn will lead to the company’s stock price falling and exacerbating the distrust of the company’s shareholders.This is a vicious cycle.It will hinder the long-term development of the company’s future.It can be said that the hands of major shareholders hold the market pricing power of the company’s shares.In order to make a deeper study of the characteristics and incentives of major shareholders to reduce their shareholdings in the company’s shares,and to analyze the specific impact of this behavior on all aspects,this article takes the controlling shareholder,a special major shareholder,as the starting point of the study and analyzes Tianlong Group.The controlling shareholder substantially reduces the typical case of company shares,analyzes the motivation and specific influence of the controlling shareholder of Tianlong Group and gains some inspiration from it.The article is basically analyzed from the following five parts.The first part is the introduction.In this part,the research background and significance of this case are elaborated.At the same time,the research results of domestic and foreign scholars on controlling shareholder reduction,incentives for reduction,consequences of reduction,etc.are combed and introduced.This article’s research ideas and methods.The second part is the basic theory of controlling shareholder reduction behavior.This part mainly includes the characteristics,methods and motivations of the controlling shareholder’s behavior of reducing shareholding of company shares,and expounds the relevant theoretical basis used in this paper.The third part is the introduction of the case reduction of the controlling shareholder of Tianlong Group.This part includes the ownership structure and background of the reduction of the company’s shareholding before the reduction of the controlling shareholder of Tianlong Group.It elaborates on the process of reducing holdings by the controlling shareholder of Tianlong Group for three consecutive times.Based on this,it sums up the specific characteristics of its behavior of reducing holdings.The fourth part is an in-depth exploration of the holdings of the controlling shareholder of Tianlong Group.This part is based on the third part of the company’s shareholding structure and business background before the reduction of Tianlong Group.Through the analysis of the company’s major financial indicators numerical value to study the reason of controlling shareholder’s behavior,and analyzes and compares the financial indicators of the company’s profitability,debt repayment ability and growth ability before and after the reduction of controlling shareholders to explore the adverse impact on the interests of the company,small and medium shareholders,and the capital market.The last part is the conclusion and inspiration.It summarizes the conclusions drawn from the behavior of the controlling shareholder of Tianlong Group and correspondingly proposes targeted and feasible countermeasures from the three aspects of the company’s internal,small and medium shareholders and the supervisory authority to standardize the controlling.Shareholder’s behavior and protect the interests of small and medium shareholders.This article will combine normative research and case study methods in the process of case analysis.Based on the research results of domestic and foreign scholars,the theory and practice are highly integrated.This article analyzes the motivation of the controlling shareholder of Tianlong Group to reduce the shareholding and its concrete and far-reaching influence on many aspects.Through such research,it is easy to see that the controlling shareholders of Tianlong Group have obtained higher returns after reducing their holdings of the company’s shares,and the operating conditions of the company have become increasingly unoptimistic.The sharp drop in stock prices has also caused small and medium-sized shareholders to suffer greater investment losses.In addition,this behavior also threatens the fair and stable development of the securities market.Based on the above analysis,we conclude that the company should first optimize the ownership structure.For controlling shareholders,they usually tend to make decisions that maximize their own interests by using relevant information such as the financial status,operating results,valuation,and expected future development of the listed company.If the equity structure of listed companies is imperfect and unreasonable,and there is no perfect independent director system to counterbalance the power of controlling shareholders,the controlling shareholders may use their own special identities to infringe the interests of the majority of small and medium shareholders.Secondly,small and medium-sized shareholders should fully understand the company’s dynamics,strengthen their own legal awareness and investment awareness,and strengthen the study of professional knowledge to protect their own interests.Finally,relevant government supervisory departments must also constantly improve the institutional constraints on such reductions,increase the penalties for the controlling shareholders of listed companies to reduce confusion,and truly achieve breakthrough regulation.At the same time,it is necessary to strengthen the mandatory disclosure of information on the company’s financial status and operating results before and after the reduction of controlling shareholders,and to establish a feasible and effective litigation path for medium and small shareholders so as to make the information of listed companies more transparent and try to control shareholders of listed companies.The influence of information asymmetry between the majority of small and medium shareholders is minimized.This article provides relevant reference for the relevant departments to improve the corresponding measures to protect the interests of the majority of small and medium shareholders,but limited by the lack of understanding of practical work experience and regulatory systems,this article also needs more in-depth analysis and research.