What Is a Blockholder?

A major shareholder is a shareholder with a relatively large share of stock. It indicates that the shareholder has the largest proportion compared with the rest of the shareholders. The controlling shareholder must be a major shareholder, but the major shareholder is not necessarily a controlling shareholder.

Major shareholder

Shareholders of a company limited by shares attend a general meeting, and each share held by them has one voting right.

On the evening of July 22, 2014, the Shanghai Stock Exchange issued the "Pre-disclosure of Shareholders' Shareholding Reductions by Listed Companies (Draft for Solicitation of Comments)", which further regulates and restricts the shareholder's holdings by listed companies. The industry expects that the Shenzhen Stock Exchange will also release such comment drafts in the near future.

The reduction opinion draft clearly stipulates that the controlling shareholder (or the largest shareholder), the actual controller and the parties acting in concert of the listed company, or shareholders holding more than 5% of the shares, are expected to be concentrated through the securities trading system within the next 6 months. If the shares held by auction or block trade alone or combined may reduce or exceed 5% of the shares issued by the listed company, the listed company shall be notified 3 days before the first reduction of shares and its plan for reducing its holdings shall be disclosed in advance.

Previously, some listed companies such as the Huali family (600503) were criticized by the exchange for reducing their holdings. Some people in the securities firm said that it was precisely because there were stock listed companies that had played a policy to reduce their holdings. This has caused damage to interests, and regulatory authorities such as the Shanghai Stock Exchange will clearly issue a document to regulate and restrict the major shareholders reductions in listed companies in order to protect small and medium investors.

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