Case Analysis Of Capital Occupation By *ST Kangde Controlling Shareholder

China’s capital market has performed well since its establishment in the 1990 s.The growth of the capital market has promoted our country’s economy;there are still some unresolved problems.Including capital appropriation by controlling shareholders,especially the mode of capital occupation,becomes diverse and hidden,which causes the problem difficult to detect.Failure to discover the capital appropriation in time will make the company worse than usual,reduce the interests of shareholders and creditors,and disrupt the market order.Therefore,analyzing the case of capital occupation by controlling shareholders can help curb capital occupation.This article analyzes *ST Kangde,with the help of three theories such as principal-agent,find out how the controlling shareholder takes up the funds,the impact of capital appropriation,causes of capital occupation,and proposes constructive measures for restraining capital occupation.Specifically,the controlling shareholder used *ST Kangde’s funds by signing a cash management agreement with the Bank of Beijing,illegal guarantees,transactions without commercial substance,and withdraw funds.Ways of controlling shareholders to occupy funds of *ST Kangde reduce the financial capacity of the listed company,cause the core personnel to resign frequently,and reduce creditworthiness and damage the interests of other shareholders and bondholders,disrupt the order of the securities market.The internal reasons are equity structure imbalance,the silence of other shareholders,inadequate execution,the board of directors and the board of supervisors is in vain,and the high equity pledges ratio.The external causes are mainly the Bank of Beijing’s illegal operations,low audit quality,lack of regulation,and the soft fine.Suggestions are made to curb the appropriation of funds by controlling shareholders,mainly for listed companies to optimize their shareholding structure,guide small and medium shareholders to actively participate in voting,adjust the organizational structure,effectively implement internal control systems,the core personnel act according to regulations,remove the control of the equity pledge part;In the external supervision,banks should enhance their compliance awareness,accounting firms should improve audit quality,China Securities Regulatory Bureau should strengthen supervision,and relevant laws should increase the cost of violations.Through analyzing the case of *ST Kangde’s capital occupation,this article believes that the controlling shareholder’s capital occupation is diverse and concealed.The capital appropriation will affect listed companies and others.Equity structural imbalance is an essential condition for controlling shareholder’s capital appropriation behavior.I hope this case can provide a reference for listed companies and relevant agencies to curb capital appropriation.