A Study On Chinese Internet Corporation Vie Framework Dismantling And The Return To Domestic Market

2015 is a very important year for Chinese Internet Corporation which is under the structure of VIE. The Storm Inc. completed privatization and come back to A market, and then followed the Fenzhong Media. Many more Chinese Internet Corporation which had received dollar investment have dismantled the VIE structure and are willing to get back to domestic market.At present, more than 1000 companies are in purpose to dismantle or are preparing to dismantle the VIE framework, the demand to dismantle is thriving. Breaking down the VIE framework is as difficult as it establishing, or even more. Internal factors of the framework and more national policy regulations both may be the potential obstacles. Complicated as the VIE framework, there are numerous shareholders, and a battery of control protocols. National rules provide a number of restriction, any negligence will ruin all the efforts. A-share market requires listed companies to reach a certain level of profitability, so it doesn’t mean the removal of VIE will contribute to market. It is obviously that dismantling VIE is always not going smoothly, but there is still a fast growing number of Internet companies are eager to set foot in this area. The domestic financial environment has changed in recent years and the doorsill coming into the market is becoming decreased, and financing is easier than ever before, which greatly enhance the determination of Internet companies to break down the VIE framework and return to A shares.This article uses the case analysis, bases on a mass of data, which is established in VIE dismantling, and carries on an in-depth research on the case of VIE structure dismantling of Storm Corporation. This article analyses the reason for breaking down VIE structure and the problems may encounter when dismantling, and provide the ways how Storm Co. solve the problems. Storm Co. may be a single case, but there is still a similarity. His success is the theoretical basis and operating examples for the following companies. A lot of guidance have been given to the companies which are setting up the VIE structure to avoid excessive stakeholders, to get rid of overly complex networks, and to simplify the protocol system, in order not to bring the companies into trouble.