Between a Rock and a Hard Place : How Do Chinese Minority Shareholders Vote When Controlling Shareholders Change Their Minds – an Empirical Assessment 无奈的赞成：控股股东变更承诺背景下中小股东表决行为的实证研究

Undertakings by the controlling shareholders in Chinese listed companies are commonplace. This study empirically examines the events where the controlling shareholders announced its intentions not to honour their undertakings. Using event study methods, our research shows that these events are associated strongly with shareholder value destruction. Chinese law requires that the proposed breach of undertakings by the controllers be approved by independent shareholders. Paradoxically, Chinese minority investors almost invariably approved these value-destructive proposals. This paradox is explainable by our empirical finding that a veto of these proposals is more costly than approving them. As such, Chinese minority investors find themselves between a rock and a hard place, and are left with no choice but to approve the proposals that come at their expense. Our research proposes that Chinese public investors be duly compensated by the controlling shareholders for a non-compliance with their own undertakings.The publication is in Chinese