Study On The Reasons Of Shang Hai Guanhua Denied In IPO

Capital market not only builds a vast direct financing platform for the enterprises, but also for investors to create a lot of investment opportunities. Many companies in China are trying to get the financing channels of the capital market through the issuance of shares and listing.The successful listed company not only can continue access to the developmental capital through the allotment of shares and designated placement, but also can improve the company’s capital structure, ownership structure and improve social reputation and strengthen the norms of the company’s operations, to make the companies bigger and stronger. Investors become the owners of the listed companies through the purchase of issued shares by the listing companies and not only the fund provided by the investors can laid a material foundation for the company’s development, but also that make investors share the benefit of economic development from the purchase of shares. Companies applying for listing must meet certain requirements to be successful in applying IPO in the relevant section of capital market, for example, to meet the corresponding legal requirements and the corresponding financial requirements. However, every year, there are about 1/3companies applying for listing that do not meet the relevant requirements of the supervision organizations were rejected, the main reason of denied IPO had seven issues that included the ability of sustained profitability, independence, the use of raising fund, standardized operation, accounting, information disclosure, and the main qualification. The reasons why the companies’ IPO were denied were different. In this paper, Shanghai Guanhua over the cases denied in IPO is studied as a research object, and the reasons of the denied IPO are deeply analyzed. Generally, companies applying for listing that were denied in its first application for IPO would be able to successfully pass to audit of CSRC in the second time through the rectification. However, Shanghai Guanhua was denied in IPO neither by CSRS and this situation is very rare. Therefore, it has very high practical value and theoretical significance to study the causes of Shanghai Guanhua denied in IPO..This paper is divided into four parts. The first part is the introduction, which includes the background of this topic, research purposes and significance. The second part is the case background, including the company’s general situation and other’s companies in this industry in the IPO reporting period and the relevant reasons of the both IPO denied. The third part is case analysis, and in this part, the author applied accounting theory, methods andtechnology, to find out the problems in the both application for IPO. In the fourth part, the paper gets same enlightenment and make outlook.