Xintai Electric's Forced Delisting Case Study

The perfect and highly operational delisting system in the capital market can improve the overall quality of listed companies,and can make the securities market run smoothly and orderly,and also protect the interests of investors.However,since China's delisting system was officially established in 2001,the average delisting rate was less than 2%,and the implementation of the delisting system was not satisfactory.In addition to the reasons for the listed company itself,this is not unrelated to the imperfections of the standards,processes,and supporting systems for the delisting system in China.Whether China's securities market can develop healthily and whether investors have full confidence in the market is closely related to the improvement of the delisting system.On October 15,2014,the CSRC issued the “Several Opinions on Reforming and Perfecting the Delisting System of Listed Companies”.The scope of mandatory delisting has increased,including fraudulent issuance and major information disclosure violations.It shows the determination of the Construction Management Office to increase penalties for violations in the securities market.At the time when the CSRC actively promoted the delisting system reform,Xintai Electric's major illegal activities were fraudulently issued.Xintai Electric is the first company in China to be forced to withdraw from the market due to fraudulent issuance.It has far-reaching significance for exploring the improvement of China's delisting system.This paper firstly combs the development context of China's delisting system,introduces the relevant theoretical knowledge of delisting,compares the differences between the domestic and international delisting systems,and provides a certain theoretical basis for the article.Then we will introduce the delisting process of Xintai Electric in detail,analyze the problems existing in the participating entities in the process of delisting,explore how to be as perfect as possible at the institutional level,and give corresponding suggestions to enterprises,intermediaries,regulators and investors..This paper is divided into six parts: the first part is the introduction part,including the research background,significance,research content,etc.,which plays a leading role in the whole text;the second part is the combing of the relevant theory of delisting,laying a theoretical foundation for the full text;The third part is an introduction to the background of the case,including the introduction of Xintai Electric Company,the status of the industry,the listing process and the mandatory delisting process and the illegal situation.The fourth part analyzes the four aspects of the company's own operation and management,the supervision of intermediaries,the mandatory delisting system and the protection of investor rights.The first is to analyze the company's financial status and the financial fraud used in the fraudulent issuance;secondly,the accounting firm and the sponsoring agency are in the process of performing external regulatory duties;the next is the delisting standard,the delisting process and the withdrawal.The supporting system of the city to explore the improvement of the delisting system;finally,from the perspective of investor rights protection,it analyzes the restrictions on shareholding reduction,the establishment of the delisting period,the first payment system and the compensation of listed companies.Finally,based on the above analysis,we will summarize a series of problems reflected by this incident,and give corresponding suggestions to companies,intermediaries,regulatory agencies and investors.