Research On Controlling Shareholders' Propping And Tunneling Behavior Of Guanfu Holdings Co.,Ltd.

Corporate governance has been regarded as an enduring hot topic among listed companies in China,and the conflict of interest between controlling shareholders and small & medium shareholders in corporate governance has attracted widespread attention from scholars.The shareholding structure of companies in emerging capital markets such as China tends to be highly concentrated and dominant.A dominant position means internal shareholders' control,and the most prominent problem it brings is manipulation and plunder by controlling shareholders.For the self-interest motive,the controlling shareholders of listed companies sometimes rely on their own equity advantages to maximize their own interests by implementing tunneling behavior,emptying out corporate assets,and harming the interests of minority shareholders.However,controlling shareholders do not always take tunneling behavior to evacuate the assets of listed companies.When necessary,they also take various propping behavior to promote the development of listed companies.Therefore,it is necessary to study the controlling shareholders' propping and tunneling behavior.This article firstly relies on the current research results of domestic and foreign scholars on the support of controlling shareholders of listed companies and the behavior of tunneling,sorts out the motivations,specific methods and effects of controlling shareholders' implementation propping and tunneling behavior,and summarizes specific measures to control the controlling shareholders' tunneling behavior.Secondly,through the case analysis method,select the typical case of Guanfu Holdings,take the departure of the chairman of Guanfu Holdings in 2018 and the civil lawsuits faced as the starting point,and combine the companies' annual reports and announcements to disclose to the controlling shareholders.The clan conducts specific research on propping and tunneling behavior,confirming the correlation between propping behavior and tunneling behavior.In order to turn losses into profits and obtain refinancing,the controlling shareholders has supported the development of listed companies through direct loan guarantees for listed companies,connected transactions,direct funding,and mergers and acquisitions.With the advantage of absolute control,the controlling shareholders,for selfishness,uses the conditions created by propping behaviors to continuously engage in large-scale capital occupation and reduction,and provides listed companies with guarantees for the companies which they control and implements tunnelings.The behavior to maximize their own interests has severely adversely affected the development of listed companies,hindered the companies' development,and harmed the interests of small & medium shareholders.In order to make listed companies more standardized in the capital market,to achieve long-term development,and to avoid a series of self-interest behaviors of controlling shareholders in the case,this article describes the relevant governance countermeasures and recommendations from four aspects: The first is to optimize the shareholding structure and achieve internal checks and balances;the second is to strengthen external supervision and improve auditing;the third is to improve relevant laws and regulations and severely punish violations;the fourth is to play a restrictive role for small & medium investors.The purpose of this article is to systematically sort out the specific path of controlling shareholders implementation propping and tunneling behavior in the case,to explore the relevance between controlling shareholders' propping behavior and tunneling behavior from a micro perspective,and to provide a new research perspective to inhibit the controlling shareholders' benefit transmission behavior in the field of modern corporate governance.