Discussion On Large Shareholders' Illegal Occupation Of The Listed Companies Funds

With the development of China's economy,China's security market has become more mature and plays an important part in China's economy.However,there are still many problems seriously hindering the development of the security market,in which large shareholders' illegal occupation of funds is a prominent problem disturbing the security market.The large shareholders who have actual control rights of a listed company tend to maximize the interests of themselves rather than maximize the company's value,they illegally occupy the company's funds in different ways.However,the behaviors can lead to a negative impact on the development of listed companies,and harm the interests of minority shareholders,they affect the normal operation of the company and hinder the development of the capital market.The China Securities Regulatory Commission has been rectifying the phenomenon that large shareholders illegally occupy the funds of listed companies.However,the phenomenon that large shareholders illegally occupy the funds of listed companies has existed all the time.Some listed companies have still become their cash cows under the great control of the listed companies.In the securities market,there are also many incidents of illegal occupation of funds of listed companies by large shareholders.Therefore,how to restrain this phenomenon of large shareholders' illegal occupation of funds has always been a problem in China's capital market.If such problems can be properly solved,it will be good for the stability and development of China's securities market.Shanxi Antai Group Co.,Ltd.completed its industrial and commercial registration in 1993.Li Anmin became the controlling shareholder and actual controller of the company with 70% shareholding in 2000.In 2013,Antai Group was successfully listed on the Shanghai Stock Exchange with the approval of the China Securities Regulatory Commission.Antai Group's major shareholder Li Anmin and his son Li Meng initiated Antai Holdings in 2006,holding 90% and 10% of the shares respectively.Xintai Steel Co.,Ltd.was established in 2005 and is a wholly-owned subsidiary of Antai Holdings.Antai Group and Xintai Iron and Steel Co.,Ltd.belong to the same industry.Because of the unreasonable employment of the large shareholder Li Anmin,there has been a lot of related business transactions in their current operating.However,Xintai Iron & Steel Co.,Ltd.experienced operational difficulties in its development,so the large shareholder Li Anmin illegally occupied the funds of the Antai Group through connected transactions and capital lending,which seriously affected the sustainable operation of the Antai Group.the Antai Group received an audit opinion with an emphasis on matter paragraph twice due to large shareholders' illegal occupation of the funds.This paper analyzes the specific ways and methods of large shareholders infringing on the interests of small shareholders from the cases of the Antai Group.At the same time,this paper also puts forward relevant suggestions on how to limit and reduce the phenomenon of large shareholders' illegal occupation of funds and how to improve resource allocation and investment efficiency.The research conclusion of this paper exists a certain theoretical reference value for the policies and laws.At the same time,this paper expands and depth of the theory of corporate governance,especially the agency between large shareholders and small or medium shareholders Contradiction research.After collecting and sorting out relevant research at home and abroad,and based on the Asymmetric Information Theory,the Principal-agent Theory,and the Control Rights Theory.this paper has seriously studied the case of Antai Group.based on comprehensive analysis,it is found that Li Anmin who is the large shareholders of Antai Group occupied the funds mainly through related transactions,capital lending,and related guarantees.After the illegal occupation of funds,Antai Group suffered many problems such as insufficient operating cash,reduced solvency,weakened operating capacity and profitability.At the same time,it analyzes the reasons for the case of Antai Group from the aspects of internal governance and external supervision.The main reasons are that the large shareholders have absolute control,the internal governance of the company is not perfect,the information disclosure is not timely,and the regulatory punishment is insufficient.Finally,the conclusions and enlightenments of the case study are put forward: perfecting the corporate governance structure is fundamental to prevent large shareholders from violating the related rules;perfecting the related party transaction system can reduce the opportunities for large shareholders from violating the related regulations;The serious punishment will increase the cost of violations;relevant departments should improve the related laws to strictly regulate the information disclosure.