Analysis On The Risk Of Backdoor Return Of Chinese Concept Share And Its Control

In recent years,due to the high valuation of innovative technology stocks in the domestic capital market,in contrast,many of the Chinese stocks listed on the US capital market have been investigated by short-selling institutions,causing the market to question the Chinese stocks.Since then,the share price of China Stock Exchange has suffered a crisis of confidence,and the stock price has been sluggish,and the valuation level is far lower than the domestic capital market.Coupled with the rapid development and innovation of China's capital market in recent years,the listing of the GEM and the New Third Board has attracted more and more Chinese stocks to return to the road of return.However,in 2016,the China Securities Regulatory Commission tightened the review of the return of China Stocks to A shares.On December 29,2017,Qihoo 360 successfully completed the meeting with the Jiangnan Jiajie listing plan,which means that the highest-priced Chinese stocks in the market have successfully returned to the A-share market.This article takes Qihoo 360 back to the A-share market by taking Jiangnan Jiajie as an example,and analyzes the risks and control measures in the process of returning from the backdoor of the stocks.It is hoped that the successful return of the case companies can provide valuable reference for other Chinese stock companies that intend to return.This article uses Qihoo 360 to successfully take advantage of Jiangnan Jiajie as a case study,using literature research and case analysis to combine the selected cases.Firstly,it sorts out and reviews the domestic and foreign related literatures on the privatization of listed companies,the return of stocks in China,and the risk control of backdoor listings.Secondly,it expounds the related concepts and theoretical basis of the risk control of stock returns in China,and then analyzes the motivation and risk of return stocks in general.On this basis,the process of Qihoo 360 privatization delisting and backdoor listing is detailed,and the motivation behind its return is analyzed.Qihoo 360's return to the cause includes the company's undervalued value,frequent shortselling institutions,adjustment of the company's business strategy,and higher domestic valuation.Next,this paper discusses in detail the risks of Qihoo 360's privatization delisting,dismantling VIE architecture and backdoor regression,and analyzes the causes and effects of risk.Finally,it analyzes Qihoo 360's delisting for privatization and dismantling VIE.The control measures of the three stages of the structure and backdoor return.In the privatization delisting stage,Qihoo 360 adopted risk control measures such as stock repurchase at reasonable prices,selection of appropriate tender investors,equity financing using a layered distribution structure,and dual shareholding structure with different rights of the same shares.During the phase of dismantling the VIE architecture,Qihoo 360 adopted risk control measures such as selecting a special tax restructuring plan and adopting a multi-layer transaction structure.In the backdoor listing stage,Qihoo 360 adopted a divestiture of listed entities and its poor performance.The business,the use of reverse absorption for mergers and acquisitions,close cooperation with the national network security department,the selection of appropriate shell companies and other risk control measures.Through the research on the case enterprises,it is found that the multi-layer distribution model solves the risk of payment ability in the privatization stage,and the two-tier shareholding structure effectively avoids the risk of decentralization of the shareholding structure after the dismantling of the VIE,and the core business that conforms to the national industrial development strategy reduces the risk of approval for listing.Finally,based on the analysis of the risks and control measures in the case of the caseback of the case company,this paper summarizes the risk control experience of Qihoo 360 backdoor listing and the matters needing attention in the return of the stock companies.The successful experience of Qihoo 360 risk control measures lies in the privatization stage using a multi-layered distribution financing model to resolve the ability to pay for the ability to pay.The establishment of a two-tier shareholding structure avoids the risk of decentralization of control and the core business that conforms to the national industrial development strategy reduces the risk of approval.The results of this case analysis reminded the listed companies to focus on preventing legal litigation and payment ability risks during the privatization delisting stage.It is also necessary to design a reasonable equity financing mechanism to prevent the decentralization of control rights.Finally,in the backdoor listing stage,it is necessary to understand the shell company in depth to reduce the risk of approval.