Analysis Of The "Tumleling" From Related Party Transaction

In countries with low level of investor protection,concentration of equity leads to serious "tunneling" by the management of listed companies,which may cater to the interests of controlling shareholders at the cost of losing the interests of minority shareholders.Controlling shareholders have the ability and motivation to realize their private rights of control through specific ways.Thus,the interests of minority shareholders are seriously damaged.Because of the particularity of our country's securities market,the controlling shareholders with high proportion of shares in listed companies generally exist.The incidents of controlling shareholders encroaching on the interests of small and medium-sized shareholders occur frequently.At present,the relevant laws and regulations of our country are not yet perfect,and the protection of small and medium-sized investors is poor.Tunnel excavation has become the encroachment of controlling shareholders The direct means of minority shareholders' interests.The fundamental reason for controlling shareholders to encroach on minority shareholders lies in the information asymmetry between controlling shareholders and external investors.This paper constructs an analytical framework for controlling shareholders' rights encroachment through such aspects as information asymmetry,contradiction between principal and agent,controlling ability of major shareholders and market supervision,and interprets the way and influence of controlling shareholders' interest encroachment.From the perspective of agency theory,based on the existing research conclusions of "tunneling" at home and abroad,and through reading a large number of Chinese and English literature,this paper first elaborates the concepts and methods of controlling shareholders,related transactions and "tunneling" through normative analysis,and then analyses the case of " tunneling" of controlling shareholders of Zhejiang Haina Company,combining the two.From a deeper level,this paper summarizes the causes of controlling " tunneling " behavior,and puts forward corresponding measures to regulate the behavior of controlling shareholders.In this paper,normative analysis method is used to combine theory with case study to further study the "tunneling" behavior of controlling shareholders ‘affiliated transactions.The normative study is mainly applied to the behavior of controlling shareholders of Listed Companies in China.It combs the basic characteristics and main ways of "tunneling" from the theoretical part,and points out the implementation behavior of related-partytransaction type tunnel excavation.In case study,the author draws conclusions and puts forward corresponding suggestions on the internal and external motivation analysis,the specific process and the consequences of "tunneling" in Zhejiang Haina Company Holdings East.The case selected in this paper is typical and representative.The study of this case is helpful to promote the research of controlling "tunneling".Controlling shareholder's interest embezzlement will damage the company's value and cause the loss of the interests of small and medium-sized shareholders.Therefore,China's regulatory authorities should attach importance to this kind of behavior and improve relevant laws and regulations to supervise and restrict such behavior of large shareholders.This article is divided into five chapters.Chapter one,introduction,mainly gives a general description of the background and significance of this paper.Chapter 2,the theoretical overview of related party transactions and "tunneling",elaborates the related concepts and economic consequences of "tunneling".Chapter three,the general situation of related-party transaction "tunneling" in Zhejiang Haina Company,introduces the background of Zhejiang Haina Company,and specifically analyses the behavior method of controlling shareholder "tunneling".Chapter IV,the motivation analysis and economic consequence analysis of the "tunneling" of the controlling shareholder of Zhejiang Haina Company,and the impact of its "tunneling".Chapter 5,the lessons and Enlightenment of the case,combined with the above case analysis,draws lessons,and puts forward relevant suggestions,summarizes the full text.