A Case Analysis Of The Fraudulent Issuance By Xin Tai

Since the 1990 s,China's securities market has made a rapid development;numerous companies are trying to list in the stock market,so as to solve the problem of the funds required by the company development and improve the company's image.However our country's securities market started relatively late,the related mechanism is not mature enough and violation cost is low,resulting in a number of corporate financial fraud events repeated.With the continuous development of our country's economy,the market competition between the enterprises is more serious than before,some companies do not meet the listed requirements for IPO,but for their own interests,they embraced the road of fraud issued.Fraud issued is not only seriously damaging the interests of minority shareholders,but also disturbed the development of capital market in our country.So analyzing the listed company's fraud of capital market in our country,can better insight into the means and motivations of fraudulent issuance and put forward the suggestions to prevent and manage fraudulent issuance so as to promote the development of capital market in China.This article is aimed to study the problems of the fraudulent issuance by analyzing of actual case in Xin Tai Electric on the gem for example.The case of Xin Tai Electric issued on fraud is a typical case.Xin Tai Electric was listed on the germ market in 2014,it had achieved great progress,however,after investigating,we find that it was a castle in the air which is established on the basis of fraudulent issuance.In order to achieve the purpose of listing,Xin Tai Electric uses various means to scale down accounts receivable balances,through less bad debts and raw material costs and the use of tax concessions inflated profits.Due to the asymmetry of information,a large number of small and medium-sized investors buy a large number of shares of the company,and they have suffered huge losses.When investigating its reasons,we can combine the GONE theory from greed,opportunities,demand and expose to analyze the company's motivations.This case has a bad effect on the market,and it is seriously damaging the interests of minority shareholders and the development of capital market in our country.So it is necessary to put forward the countermeasures and the suggestions to prevent fraudulent issuance.The countermeasure of this paper are made primarily on the basis of the motivations of Xin Tai Electric issued on fraud.So we should fundamentally eliminate their motivations to prevent fraud case happen again and promote the healthy development of securities market in our country.Therefore,we can put forward the corresponding precautionary measures according to four factors.Specific suggestions include improving the moral environment,reducing fraud opportunities,reducing bad demand and increasing the possibility of exposure.