Huaze Cobalt&Nickel Company Large Shareholder Capital Occupation Case Study

The large shareholder's encroachment on the listed company's funds has always been a persistent problem in China's A-share market.In 2001-2005,A-shares had a wave of violations of major shareholders' share of the rules,which caused many companies to fall into operational difficulties and even partially forced to withdraw from the market.The regulatory authorities have successively introduced a number of regulatory policies and measures,and the issue of major shareholder funds has been curbed in a timely manner.In recent years,major shareholders have relapsed in violation of regulations,and relevant news is still frequently reported in newspapers.The seizures of major shareholders such as ST Baoli,ST Kangdexin,Kangmei Pharmaceutical,Huaze Cobalt&Nickel seriously hindered the company's business activities and harmed the interests of small and medium shareholders,and even caused a crisis of confidence in the capital market.Therefore,the shareholder accountability has become an urgent problem to be solved in the A-share market.The paper selects the majority shareholder of Huaze Cobalt&Nickel,one of the 20 typical violation cases in 2018,as a case study object.The thesis is divided into five parts.The first part mainly elaborates the background and research ideas of the topic.The second part expounds the theoretical research on the shareholder's account.In the case study,we promoted through the three-stage logic of “method,motivation,and cause”.The third part introduces the way and process of the shareholder of Huaze Cobalt&Nickel,through the non-commercial purchase and sale contract for related party transactions;the transfer of funds through commercial paper transactions;the accounting of false notes as repayment;the listed company system is large Shareholders' related parties provide financing guarantees;major shareholders transfer related party debts to listed companies;major shareholders' measures to solve capital occupation are not fulfilled.The fourth part analyzes the motives and causes of large shareholders' shareholdings,the non-ferrous metals industry continues to slump,the narrow financing channels of private enterprises and the blind capital expansion.The Wang family has generated huge capital demand,and the equity pledge and performance compensation have strengthened the payment.motivation.Due to imperfect corporate governance,chaotic internal control,lack of external supervision,and low cost of major shareholder violations,the Wang family used its own control power to successfully implementthe invasion of listed companies,and then elaborated on the malicious short-selling of major shareholders.Impact.The fifth section gives recommendations for suppressing the shareholder's share.The paper combines the theory and practice of the thesis to systematically analyze the Wang family's capital occupation of Huaze Cobalt&Nickel,and explore the reasons for its implementation,and put forward targeted suggestions.Including improving the governance structure of listed companies,giving full play to internal and external supervision,improving the laws and regulations that inhibit the shareholder's share of funds,improving the performance compensation system constraints,and establishing a large shareholder equity pledge review and supervision mechanism.I hope that I will be inspired to solve the problem of the large shareholder's capital in China's capital market.