Research On The Motivation And Market Effect Of “Fraudulent Share Repurchase”

As early as the 1980 s,the share repurchase began to rise in the western countries.After entering the 21 st century,it became an important financial tool for the western capital market.However,the share repurchase enter China was relatively late.The first case of share repurchase occurred in 1992,but in the following ten years,share repurchase has not achieved substantial development in China.It was not until 2005 that China introduced the first document for share repurchase management specifically,which is the basis for the share repurchase in China.After that,the number and scale of China's share repurchase has gradually increased,it has reached thousands of cases in recent years.In general,the related laws and regulations of the share repurchase in China has been greatly developed and improved.With the in-depth development of share repurchase in China,the problems have begun to become exposed.The most prominent problem is that the “fraudulent share repurchase” frequently occurs.The so-called “fraudulent share repurchase” refers to the fact that the company finds various reasons to terminate the repurchase plan or delays to repurchase or repurchases few shares after releases the repurchase plan.In 2018,China introduced a new regulation for share repurchase.The main purpose of the new regulation is to promote the development of share repurchase in China.However,while supporting and encouraging share repurchase,the regulatory agencies and leaders have also emphasized the need to crack down on “fraudulent share repurchase”,because of that “fraudulent share repurchase” has become a serious problem in the development of China's share repurchase.Therefore,in view of the above phenomena and problems,the author's research on the motive and market effect of the “fraudulent share repurchase” has academic and practical significance.Through the research of this paper,on the one hand,it can provide some ideas and methods for small and medium investors to identify the authenticity of motives and forecast the implementation results,on the other hand,it can provides some suggestions for the supervision of China's share repurchase.This paper studies the motives and market effects of “fraudulent share repurchase” by using the combination of statistical analysis and case analysis mainly.In order to judge and analyze the sincerity and motive of the “fraudulent share repurchase”,the author identifies the repurchase ability and repurchase motives of “Fraudulent share repurchase” from the aspects of financial status and action events;In order to judge whether the small and medium investors in China can identify the “fraudulent share repurchase” effectively,it is mainly to study the market effect generated by the listed company after the release of the repurchase plan;At the same time,in order to analyze the consequences of the “fraudulent share repurchase”,the author uses case analysis to study the market effects of the termination of the repurchase program.Through the research,this paper finds that most of “fraudulent share repurchase” have hidden motives and the financial performance is poor.Therefore,small and medium investors can take advantage of the financial situation and action events to judge and analyze the sincerity and motive of the listed companies;the study also found that the “fraudulent share repurchase” can produce significant positive market effects in the short term,which shows that Chinese small and medium investors can't effectively identify the “fraudulent share repurchase”;at the same time,the listed company will have a very negative market reaction when terminating the repurchase plan,which shows that the “fraudulent share repurchase” is likely to damage the interests of small and medium investors seriously.Finally,based on the above conclusions,the author throws out some relevant suggestions.