Abstract: Based on the given existence of new investment opportunities, this paper constructs an extended model of controlling shareholder’s expropriation to extend the classical single-term expropriation model, and analyzes theoretically the private benefits of control from the aspects of cash flow rights proportion, legal protection of mid-small shareholders and new investment return rate. According to the unique institutional context and legal environment, this paper examines empirically the theoretic results summarized formerly based on data of Chinese listed companies which controlling rights diverted in A stock markets of Shanghai and Shenzhen from 2000-2008. The conclusions show that: it is the negative relationship between the level of private benefits of control and new investment return rate, and the increase of new investment return rate which can decrease the level of private benefits of control; we find an inverted "U"-type relationship between them through adjusting the regression model, but this conclusion is not significant; Furthermore, we examine the relation between the level of private benefits of control and legal protection of mid-small shareholders using the proportion of independent director in board of directors, and find it is not relational significant between them, once again our independent director system in corporate governance is proved non-efficient.

Key words: new investment opportunity, ultimate controlling right, large shareholder’s expropriation, private benefits of control