Group Finance Company and expropriation of controlling shareholder

This paper is based on internal loans of Group Finance Company, analyzing the influence that transaction cost and supervision cost of preventing the controlling shareholders' expropriation by model analysis. The research results show that controlling shareholders will gain private benefit of control power through making use of internal loans of Group Finance Companies. That strengthening legal protection to investors, perfecting the governance structure of Group Finance Company, and listing Group Finance Company can reduce controlling shareholders' expropriation and promote the healthy development of our country's Group Finance Companies.