This paper starts from the concept and distribution of Tunneling. The main reason of Tunneling is the concentration of Equity andthe incompletion of legal protection for small and medium-sized investors. Tunneling not only infringes small and medium-sizedshareholders＇ interest, but also violates company＇s benefit, and further damages the interest of creditors. Tunneling proceeds invariety of ways, one of them is Related Party Transaction, which severely erodes company＇s benefit. The suggestedcountermeasure for Tunneling is adjusting the property structure, completing the legislation and improving the independentdirector system.
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