Research On The Major Shareholder Reduction Of Sanqi Mutual Entertainment And The Protection Of The Rights And Interests Of Small And Medium Investors

The reform of no tradable shares was carried out in 2005,which gave impetus to the rapid growth of China’s capital market into the era of full circulation.After the lifting of the ban on restricted shares,it is normal for major shareholders to plan to reduce their holdings of shares because of the rapid appreciation of their equity in listed companies.After the lifting of the ban on restricted shares,it is normal for major shareholders to plan to reduce their holdings of shares because of the rapid appreciation of their equity in listed companies.However,in the wave of large-scale reduction,the phenomenon of disorderly reduction appears constantly.Therefore,in 2015-2017,China Securities Regulatory Commission successively issued rules on reducing holdings.However,in 2018,there was another wave of reduction,and there were 7140 reduction events in that year alone,in which the majority shareholders used the advantage of control rights to extract additional income was more prominent.Small and medium-sized investors are the backbone of China’s capital market,whose rights and interests are damaged is not conducive to the stable development of the securities market.Therefore,the research on the reduction of large shareholders and the protection of the rights and interests of small and medium investors is still of great significance.This paper select case enterprise notoginseng and entertainment,with its major shareholders holdings as the research object,the principal-agent theory,theory of signal transmission and control of income theory,under the guidance of underweight based on China’s capital market situation and the current situation of protecting minority investors’ rights and interests,to analyze its holdings of arbitrage and the protection of the rights and interests of investors,the game relation between small and medium-sized investment.Studies have shown that there are three steps in the path of controlling shareholders’ reduction.Before the reduction,the selective release of good news pushes up the stock price and keeps the performance with the help of M & A enterprises;during the reduction,a variety of skillful arbitrage methods including block trading,employee stock ownership plan,stock exchange ETF,share buyback,etc.are adopted;after the reduction,the control rights are changed and listed companies seek new life.Moreover,this illegal reduction not only has a bad impact on the capital market of enterprises,but also seriously damages the legitimate rights and interests of small and medium-sized investors.To investigate the causes of the infringement of the rights and interests of small and medium investors in the reduction of holdings by large shareholders,the purpose of large shareholders is not only to obtain excess returns and relieve the financial pressure;There are also listed companies "backdoor" financing listed,the existing intention to support the cooperation of major shareholders;Moreover,the imperfect protection mechanism of the rights and interests of small and medium-sized investors and their weak ability to protect their own rights and interests provide opportunities for infringement.In the end,in order to effectively prevent improper reduction of holdings by major shareholders and protect the rights and interests of small and medium-sized investors,targeted Suggestions are provided from the perspectives of listed companies,market regulatory authorities and small and medium-sized investors.