Controlling Shareholders′ Tunneling and Investor Protection——An Analytical Framework

The structure of corporate ownership is not dispersed but significantly concentrated in most countries.However,controlling shareholders expropriate minority shareholders rather than monitor management,resulting poorer corporate governance.Because controlling shareholders entrench listed companies by some means or other,the corporate value is greatly impaired,the loss of which is ultimately borne by minority shareholders.The article analyzes this problem in China under a theoretical framework and concludes that the main forces to protect the interests of investors from the entrenchment are other shareholders,institutional investors,independent directors and external auditors.