Research On The Path Of The Ultimate Shareholders Of Listed Family Companies Encroaching On The Interests Of Small And Medium Shareholders

In China's listed family businesses,the problem of encroachment of interest has attracted much attention from scholars.When the actual controller of a listed family company uses the pyramidal holding structure to obtain most of the equity,it becomes the controlling shareholder,that is,the ultimate shareholder of the listed company,thereby causing its control of the listed company to deviate from its cash flow right.Such deviations will lead to various levels of ultimate shareholder embezzlement,the extraction of interests of listed companies,and the violation of the interests of small and medium investors.As the two rights deviation increases,the motivation for infringement will also become stronger.And because the ultimate shareholder indirectly holds the shares of a listed company and cannot directly control the listed company,it often uses the method of equity control and social capital control to carry out encroachment of interests.This article studies the path of the ultimate shareholders of listed family companies infringing on the interests of small and medium shareholders.Under the equity control chain analysis model,the ultimate shareholders control the shareholders' meeting and the board of directors through their proportional advantage in the shares of listed companies;they also use their power to control the appointment and removal of management members.Under the analysis model of social capital control chain,the ultimate shareholders can use their social relationships to support the development of listed companies;although the ultimate shareholders can control the appointment and removal of management members,it does not mean that they can completely control the management.Unlike the executive-appointed management of state-owned enterprises,the ultimate shareholders of family-owned enterprises often transfer relatives and friends who are strongly associated with themselves to the management to strengthen management control.The path of appropriation of interests can be divided into tunnel mining behaviors and supporting behaviors.In this case,tunnel mining behaviors can be divided into dividend policies,share reductions and equity pledges.They use the equitycontrol chain to adopt a large profit distribution when the ultimate shareholder needs a large amount of funding,and do not allocate or distribute less when the funds are not needed,and use the unfair dividend distribution policy to seek benefits for themselves;they use the equity control chain to carry out the stock reduction and cashing out at the high stock price to solve the problem of their own capital needs,causing the interests of small and medium shareholders to be lost;the ultimate shareholders carry out a series of equity pledges to solve the capital needs for the controlling shareholders and their subsidiaries.Support behavior is to use its own social capital to input high-quality resources into listed companies to improve the company's performance and lay the foundation for encroaching on the interests of listed companies to a greater extent in the future.Then,make suggestions for preventing the ultimate shareholders from infringing on the interests of small and medium shareholders.First,the relevant mechanisms for equity checks and balances can be implemented by reforming the equity system,introducing institutional investors,and improving relevant legal systems.Second,improve the information disclosure system,we can improve the timeliness of information disclosure,improve the completeness of disclosure,and strengthen the authenticity of information disclosure.Third,strengthen internal and external governance of the enterprise,we can increase the proportion of independent directors and further play the role of the board of supervisors and strengthen external supervision of the enterprise.