Research On The Reduction Of Major Shareholders Of Ken Holding Co.,Ltd

Since the implementation of non-tradable shares reform,China's stock market has achieved rapid development.By the end of 2018,the A-share market has more than 3500 listed companies.With the help of the capital market to raise funds,many large shareholders of listed companies reduced their holdings crazily after the lifting of the ban.According to Wind statistics,1097 listed companies issued a reduction announcement in 2016,with a total market value of about 279 billion yuan.Throughout 2017,the number of listed companies with net reduction dropped to 947 due to unprecedented stringent new regulations,but the amount still reached 159.982 billion yuan.The reason for this phenomenon is that the lifting of the ban on restricted shares gives the major shareholders a shortcut to achieve wealth growth.Instead of earning a dividend from the growth of the company by painstakingly operating the company,the major shareholders can obtain more direct and rapid returns by reducing their holdings of the shares after the lifting of the ban.In addition,the major shareholders have a huge information advantage over the small and medium shareholders.A series of measures can be taken to obtain greater reduction returns,and there is no good way to restrict the reduction behavior of large shareholders at the regulatory level.Even if very strict reduction regulations have been issued in recent years,large shareholders can still take appropriate measures to avoid supervision.Moreover,the regulatory authorities still need to strengthen and improve the supervision and punishment measures,which are relatively low.In the context of the low cost of breaking the law,some major shareholders even take risks to prepare for the reduction through profit manipulation or illegal information disclosure in order to maximize the reduction benefits.Major shareholders have the right to reduce their shareholdings,but the reduction will bring some negative effects.Sometimes we can judge the development of a listed company directly from the number of major shareholders' reduction.Reduction will not only increase the fluctuation of the company's stock price,but also bring adverse effects on the company's operation and subsequent sustainable development ability.As the case study object,one reason is that the performance of Ken began to decline after a short rise after listing.Especially after the reduction of major shareholders in 2014,profits plunged by 90%.The other reason is that Ken was punished by the regulatory authorities in 2015 for violations.Chapter 1 of this paper discusses the current research results on the motivation,mode and impact of the reduction of large shareholders' holdings in academia.The second chapter introduces the theoretical basis of the reduction,including the basic theoretical knowledge of the reduction and the theoretical basis of the impact of the reduction of large shareholders on shareholders' wealth.The third Chapter is the case introduction,including the main business of listed companies,the operation and financial situation of listed companies before the reduction of major shareholders,and the introduction of the reduction process of major shareholders.The next two chapters are case studies.Firstly,the motivation and ways of shareholder reduction are analyzed,and then the impact of shareholder reduction on market value management and corporate governance is analyzed.The analysis results show that the major shareholders of Ken have certain earnings management behavior,which has negative impact on the company's development,and the interests of small and medium shareholders have been damaged.The special feature is that the corporate governance level has not been improved because of the reduction,which is manifested in the decline of the quality of corporate governance reports,frequent violations of disclosure and the serious decline of participation in small and medium shareholders.The sixth chapter is the enlightenment and countermeasures.Through the analysis of the case of shareholder reduction in Ken Holding Co.,Ltd,three enlightenments are obtained.First,it is found that in order to avoid supervision,large shareholders will continue to use new means to make their reduction behavior more concealed and achieve the goal of smooth reduction.Of course,these have attracted the attention of the regulatory authorities;second,the timing of shareholder reduction.The third is that the reduction of major shareholders is not necessarily conducive to corporate governance.Previous studies have shown that reduction can introduce external investors,while the participation of external investors in corporate governance can improve the level of corporate governance listing.However,the case in this paper shows that this may not be the case in practice through three aspects.Finally,there are three countermeasures,one is to protect the right of minority shareholders to participate in corporate governance,and put forward some measures to enhance the willingness of minority shareholders to participate in corporate governance;the other is to strengthen the supervision of shareholder reduction,in addition to formulating specific and strict regulations on shareholder reduction,the regulatory and set up subject matter.In order to reduce the illegal actions taken by major shareholders to cooperate with the reduction of shareholdings,speculation and the release of good news should be examined more strictly.Finally,for intermediaries,in addition to practicing within the framework of industry standards,intermediaries should also bear corresponding social responsibilities.