Research On The Motivation And Market Impact Of Major Shareholders Of Xinchao Energy's Illegal Reduction Of Holdings

With the completion of our country's share-trading reform and the lifting of the ban on restricted shares,our country's stock market has entered the era of full circulation,which has led to the rapid development of the secondary stock market.However,major shareholders could use information disclosure and insider trading to reduce their holdings in violation of regulations,which facilitates their acquisition of income.The illegal reduction of holdings by major shareholders will not only infringe the rights and interests of small and medium shareholders,but also disrupt the capital market,which is not conducive to the long-term healthy development of the market.To this end,the Securities Regulatory Commission is also constantly improving relevant laws and regulations to regulate the illegal reduction of large shareholders' holdings to a certain extent,and to curb the illegal reduction of large shareholders' holdings.However,there are still deficiencies in the punishment of major shareholders for illegally reducing their holdings and the protection of the rights and interests of small and medium shareholders.In this context,it is particularly urgent to strengthen the research on illegal shareholding reduction by major shareholders.The incident that Xinchao Energy's major shareholder Jin Zhichangsheng and his concerted action person Jin Zhichangshun were punished for their illegal shareholding reduction activities have attracted much attention.Xinchao Energy's major shareholder Shenzhen Jinzhi Changsheng Investment corporation,(hereinafter referred to as "Jinzhi Changsheng")and its concerted action person Jin Zhi Changshun reduced their holdings in the company by a total of 5.086% from February 2019 to May 2020.Disclosure of information in accordance with the regulations of the China Securities Regulatory Commission was punished by the Shanghai Securities Regulatory Commission and the Shandong Securities Regulatory Commission.The main reason for Xinchao Energy's major shareholders to reduce their holdings in violation of regulations at all costs Avoid losses.The company's chaotic internal management and imperfect external regulatory system have objectively strengthened the major shareholders' motivation to reduce their holdings in violation of regulations.In terms of reduction methods,Xinchao Energy's major shareholders not only took advantage of their information superiority to actively reduce their holdings by means of insider trading,but also reduced their holdings in a disguised form by forcibly liquidating their positions without supplementing the pledged assets when the equity pledge expired.In order to study the influence of the major shareholders of Xinchao Energy's illegal shareholding reduction,the article conducts an empirical analysis on the market effect of the major shareholders' illegal shareholding reduction through the event study method.Selecting the announcement date of the major shareholder's illegal shareholding reduction and the event day when the major shareholder did not disclose the shareholding reduction information,the results show that the cumulative excess return near the event date is negative on average,indicating that the shareholding reduction will have a negative impact on the market.Among them,the negative reaction of the market to the announcement day was greater than the reaction of major shareholders to "reduce without notice",which shows that major shareholders can achieve their own interests by maximizing their own interests by quietly reducing their holdings in violation of regulations.In order to study the impact of Xinchao Energy's major shareholders' illegal reduction of holdings on the company's value,the changes in market value before and after the reduction and the company's financial data were analyzed.The shareholders' illegal reduction of holdings had a negative impact on the company's own value.In the study of the influence of Xinchao Energy's major shareholders' illegal holding reduction on the rights and interests of small and medium shareholders,the stock price around the date of the announcement of the illegal holding reduction of Xinchao Energy's major shareholders was selected for analysis.The interests of the company have been infringed.In addition,the behavior of major shareholders to reduce their holdings in violation of regulations has also violated the right to know of small and medium shareholders.In a word,the illegal reduction of holdings by major shareholders not only realizes their own interests,but also has a negative effect on the market.The research shows that: the major reason for the major shareholders to reduce their holdings in violation of regulations is that the company's operating conditions are not good and the development prospects are limited.Opportunity to reduce holdings in order to avoid losses from falling stock prices.The imperfection of external supervision,especially the relatively small punishment imposed by the regulators on the major shareholders' violation of the regulations,makes the major shareholders' violation costs less than the violation benefits,and strengthens the major shareholders' motivation to reduce their shares.Illegal shareholding reduction by major shareholders will often release negative information to the market,and the market will react negatively to their illegal holding reduction behavior,and their illegal holding reduction behavior will not only affect the normal and stable development of the company,but also make small and medium shareholders suffer from stock declines.Losses,reducing its investment rate of return and infringing its legitimate rights and interests.In order to reduce the occurrence of illegal shareholding reduction by major shareholders and realize the stable and healthy development of the capital market,it is suggested that enterprises themselves,regulatory authorities,and small and medium shareholders should make the following efforts: First,listed companies should improve their internal governance structures and encourage small and medium shareholders to actively participate in corporate governance.,to carry out effective internal supervision over the behavior of major shareholders.Second,the regulatory authorities should improve the information disclosure system and the protection system for the interests of small and medium shareholders,and strengthen the punishment of major shareholders' violations,so as to limit the use of various means by major shareholders to reduce their holdings in violation of regulations and safeguard the rights and interests of small and medium investors.Third,small and medium shareholders should invest rationally,avoid blindly following trends,learn investment expertise,improve their professional level,actively exercise their legal rights,actively participate in corporate governance,and supervise the behavior of major shareholders to avoid infringement of their own rights.