Study on the Abuse of Control Right by the Controlling Shareholders of State-Owned Enterprises in China
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In China’s rapidly developing capital market, the problem of controlling shareholders abusing their control rights has not been solved. On the basis of analyzing the performance of the controlling shareholder’s abuse of power, this paper analyzes the harmful consequences of such abuse of power, and puts forward some countermeasures and Suggestions to solve the problem of the controlling shareholder’s abuse of control power, so as to provide a basis for improving the corporate governance system in China.
Since the reform of state-owned enterprises in China, a large number of state-owned enterprises have been transformed into joint-stock companies. At present, many listed companies and group companies in China are derived from the reorganization of state-owned enterprises. The state, as the controlling shareholder, holds the majority of the shares of the company after the restructuring, thus forming the widespread phenomenon of “one dominant share”. After the completion of the restructuring of state-owned enterprises, however, the reduction of state-owned shares is relatively lagging behind, and the non-tradable nature of state-owned shares has formed a unique phenomenon of non-tradable shares. As the controlling shareholder of the state, the circulation of the shares held by the state is limited, which leads to the stable status of the controlling shareholders to a certain extent. At present, China’s stake in the company structure, the principle of capital majority of alienation and the corporate governance structure is scientific problems should produce the abuse of corporate controlling shareholder control, because of the complexity of the company and the interests of the parties subject direction often appear contradictions and even conflicts, which led to the interests of the game between the main body. In corporate governance if you don’t have a set of scientific and effective governance mechanism governing the exercise of the controlling shareholder control, then company and the interests of minority shareholders and creditors must be difficult to secure. How to properly solve the controlling shareholder control exercise and regulation of the relevant legal issues, science to establish regulation controlling shareholders improper exercise control of the standard system, directly related to the future development direction of corporate governance system in China. Therefore, it is still an important issue that we should continue to study deeply to regulate the exercise of controlling shareholder’s control right and more reasonably protect the rights and interests of minority shareholders and their creditors.
Controlling shareholder; Abuse of control right; Corporate governance