Case Study Of *ST Bi Kang’s Ultimate Shareholder Tunneling Listed Companies

Since the reform of split share structure,China’s securities market has flourished,and the scale of listed companies has continued to expand.The pyramid shaped equity structure has become increasingly common.However,with the complexity of equity structure,the transparency of ultimate shareholder control rights decreases,and the advantages of control rights and information asymmetry are obvious.The ultimate shareholder is prone to engage in tunneling behavior that encroaches on the rights and interests of other stakeholders in the company,in order to prioritize personal interests.Based on this,the issue of ultimate shareholders tunneling listed companies is gradually becoming a hot academic research topic.By in-depth analysis of the internal mechanisms by which ultimate shareholders use their control to influence the operation and financial operations of listed companies,targeted identification and prevention of ultimate shareholders tunneling listed companies are not only beneficial for protecting the rights and interests of small and medium-sized investors,but also for promoting the healthy development of China’s securities market.The case of ultimate shareholder tunneling *ST Bi kang has a long duration,diverse methods and adverse social impact.It is a typical case of ultimate shareholder tunneling listed companies in the capital market in recent years.This article first briefly describes the key events of the case in chronological order.Then,relying on the principal-agent theory,the theory of private interest in control,and the theory of information asymmetry,a comprehensive and detailed analysis was conducted on the methods,conditions,and consequences of tunneling in the case.Analysis has found that sensitive projects such as construction in progress,non-operating funds and related party mergers and acquisitions are the means and carriers of ultimate shareholder tunneling.The smooth implementation of tunneling benefits from defects in internal governance and control of the enterprise,which brings serious consequences to the company and small and medium-sized shareholders.Based on the analysis results,this article finally proposes targeted solutions from aspects such as improving the equity structure,optimizing the board of directors,enhancing internal supervision functions,and improving internal control systems.The research results of this article show that ultimate shareholders have a prominent control advantage compared to other shareholders,making it easier to identify corporate governance loopholes and use various covert methods to tunneling listed companies.The ultimate shareholder tunneling listed company will sacrifice the interests of small and medium-sized shareholders,and in the long run,it will bring enormous pressure to the financial condition and operating environment of the listed company,resulting in serious financial risks.Therefore,timely identification of potential tunneling risks and timely improvement of internal governance and control systems are of great practical significance..