A Study On The Economic Consequences Of Reducing The Holding Of Major Shareholders Of Listed Companies

After the split share structure reform,China’s capital market has entered an era of full circulation.With the gradual listing of listed companies’ lifting of banned shares,major shareholders have embarked on the road of reducing their holdings.Due to imperfect laws and regulations,large shareholders frequently reduce their holdings.In 2014,the Shanghai Stock Exchange issued the "Pre-disclosure of Listed Company Shareholders ’Reduced Shareholding Pre-disclosures" to improve the disclosure requirements of major shareholders’ reductions.At this point,the reduction of shareholder holdings has been further regulated,but the wave of shareholder reductions continues.Generally,the reduction of holdings by major shareholders of listed companies often sends negative information to the outside world,causing negative fluctuations in stock prices and harming the interests of small and medium shareholders.But at the same time,in the case of high concentration of equity,the reduction of major shareholders can also optimize the equity structure and bring positive economic impact to corporate governance.This article combines normative research and case studies,selects Yuanli as the case study object,and delves into the economic consequences of the reduction of holdings by large shareholders for the case companies.First of all,based on collecting and collating a large amount of literature,this article reviews and summarizes the relevant research on the reduction of shareholder holdings.Secondly,this paper summarizes the relevant concepts and theoretical foundations of major shareholder reductions,including on this basis.Based on the theoretical basis of principal-agent theory,equity structure theory,corporate governance theory,and support efect theory,this article systematically analyzes case enterprises.The motivation of the major shareholders to reduce their shareholdings is that the reduction of the major shareholders of the Yuanli company not only has the motivation to obtain huge capital spreads,but also the need to improve the corporate governance structure and corporate value.This article focuses on the economic consequences of the reduction of the holdings of the major shareholders of Yuanli.In exploring the impact of major shareholder reductions on corporate governance structure,the author selects multiple indicators to measure the level of corporate governance from three levels of supervision governance,management governance and shareholder governance,and uses the entropy method to empower and calculate Measure the comprehensive score of the corporate governance level of the case to analyze the impact of major shareholder reductions on the corporate governance structure.It is found that the overall governance level of the Yuanli company is on the rise,and the reduction of the major shareholder improves the governance structure of the Yuanli company And improved the company’s governance.In exploring the impact of major shareholder reductions on financial performance,the author uses financial index analysis to select corresponding indicators from two perspectives,namely profitability and growth capability,and compares and analyzes the changes in financial indicators before and after the major shareholder reduction of Yuanli.It was found that after the major shareholders reduced their holdings,Yuanli’s company’s profitability improved significantly and its growth ability improved.In investigating the impact of major shareholder reductions on corporate value,the author uses Tobin’s Q value as a measurement index and analyzes the changes in the company’s corporate value before and after the major shareholder reductions through horizontal and vertical comparisons.Concluded the conclusion of Yuanli company’s corporate value.Finally,this paper studies the impact of the reduction of the major shareholder’s holdings of the Yuanli company on the rights and interests of the small and medium shareholders,and finds that the reduction of the major shareholders does harm the interests of the small and medium shareholders to some extent.Based on the above research conclusions,this article is inspired by the following three points:(1)Listed companies with relatively concentrated equity structures should appropriately reduce the controlling shareholder’s shareholding ratio,optimize the company’s equity structure,and improve corporate governance.(2)Enterprises must take into account the interests of small and medium shareholders and limit the rights of large shareholders.(3)Listed companies should strengthen information disclosure and broaden the channels for small and medium shareholders to obtain company-related information.