Research On The Infringement Of Minority Shareholders’ Interests From The Perspective Of Tunneling

As an important issue of corporate governance,protecting the legitimate rights and interests of small and medium shareholders is related to the good and sustainable development of China’s securities market.In recent years,the tunneling of large shareholders has been prohibited repeatedly,and how to prevent the tunneling of large shareholders has been a hot topic.Moreover,the tunneling behavior of large shareholders is increasingly hidden and complex,which is difficult to be found in time to protect the legitimate rights and interests of small and medium-sized shareholders.As a result,the legitimate rights and interests of small and medium-sized shareholders are seriously violated,which affects the confidence of investors and the good and orderly operation of the capital market.It is urgent to regulate the behavior of large shareholders of listed companies and protect the interests of small and medium shareholders.Therefore,it is of practical significance to analyze the infringement of tunneling behavior on the interests of small and medium-sized shareholders,to protect the rights and interests of small and medium-sized shareholders,to purify the investment environment in the capital market,and to formulate and improve the laws and regulations on the protection of the rights and interests of small and medium-sized shareholders.This paper uses the case analysis method and event study method to study the infringement of small and medium shareholders’ interests under the tunneling behavior.First of all,in view of the tunneling case background of * ST Tianma’s major shareholders,this paper analyzes the current situation of tunneling behavior of Listed Companies in China from two aspects of the shareholding profile of the largest shareholder and the penalty of tunneling event,leads to the reasons for case selection,and describes the business composition,organizational structure,equity structure and related parties of * ST Tianma,and reviews the tunneling event of major shareholders.Then,it elaborates five kinds of tunneling means,which are concealing the source of funds,non operating funds,large amount of prepayment funds,illegal related party guarantee and relatively hidden related party acquisition.Furthermore,the paper reveals that the tunneling of * ST Tianma’s major shareholders infringes on the interests of small and medium-sized shareholders through the weakening of profitability,cliff like decline of stock price,continuous decline of cumulative excess return,sudden decline of cash flow per share and large fluctuation of Tobin Q value and other indicators.Then,the paper analyzes the reasons for the successful tunneling of * ST Tianma’s major shareholders,and finds that the tunneling of * ST Tianma’s major shareholders provides opportunities for the vertical part-time executives,the "tunneling" behavior of the major shareholders with large profits and low illegal costs,the failure of independent directors to perform their duties,and the imperfection of the supervision law of minority shareholders.Finally,it draws the conclusion of the study,and puts forward some suggestions to improve the governance structure,optimize the relevant system construction,cultivate the awareness of rights protection of small and medium shareholders,strengthen the information disclosure and encourage external supervision.Through the research of the damage to the interests of small and medium shareholders by the large shareholder’s hollowing behavior of *st Tianma,the following three conclusions are drawn: first,the occurrence of the hollowing behavior is the result of the comprehensive effect of many factors;Second,the emptiness behavior of St Tianma shareholders has damaged the interests of small and medium shareholders.Third,we should take various measures to prevent the large shareholders’ hollowing.