Research On Earnings Management Of ST Company Based On Debt Restructuring

Listed companies often experience operational difficulties due to poor management or fierce competition,leading to capital constraints,insolvency and even the risk of bankruptcy.In order to avoid bankruptcy and liquidation,companies are likely to use surplus management to adjust their financial statements.There are about 180 ST companies in China’s securities market,and in order to achieve "cap removal",they often use debt restructuring for surplus management to avoid delisting.Debt restructuring,which is supposed to be a method used to resolve debt problems,has been used by ST companies as a means of surplus management,which has positive implications for both parties.On the one hand,creditors can well protect their own rights and interests;On the other hand,for debtors,it can optimize the unreasonable debt structure to avoid delisting risks.The earnings management of ST company based on debt restructuring not only has positive effects,but also has disadvantages that cannot be ignored.If ST company manipulates profits and window-dressing statements through debt restructuring,its earnings management is only for the purpose of "protecting the shell",which not only damages the interests of investors,but also is not conducive to the development of the securities market in the long run.In recent years,China has revised the delisting system of securities market,which will play an important role in improving the environment of securities market and speeding up and standardizing the delisting process of companies.Based on the above background,this thesis studies the behaviour and impact of surplus management through debt restructuring of ST Salt Lake,with a view to finding out how to appropriately use debt restructuring for surplus management to avoid delisting under the new delisting regime to provide a new approach and to discover the application of the new delisting regulations in a timely manner.At present,there are more studies on corporate surplus management and debt restructuring alone,but they mainly focus on the motives and means,etc.,and there are fewer studies on surplus management through debt restructuring.Based on China’s special market environment,on the basis of the introduction of theories related to surplus management,debt restructuring and the ST regime,the actual situation of surplus management through debt restructuring of listed companies is combined with the debt restructuring of ST Salt Lake as a case study for specific analysis.This thesis provides a brief introduction to ST Salt Lake’s debt restructuring,analyzes the methods of surplus management of debt restructuring,analyze the ST Salt Lake of earnings management motivation and effect,respectively from the earnings management on the financial performance of the ST Salt Lake,the enterprise value and stakeholders is analyzed,and combining the delisting rules analysis on the influence of earnings management.By summarising and synthesising the contents of the previous chapters,corresponding conclusions are drawn in terms of the motives of surplus management of ST companies,their own volume and external regulation,followed by corresponding recommendations for ST companies,regulators and investors,and accounting makers respectively.This thesis provides a new perspective on how ST companies can appropriately use debt restructuring for surplus management to avoid delisting under the new delisting regulations by examining the case of ST Salt Lake,which was successfully delisted under the new delisting regulations using a mixture of two methods: packaged sale of asset groups and conversion of debt to equity.Through an in-depth study of the ST Salt Lake case combined with an analysis of the ST company as a whole,this thesis finds out the application of the earnings management behavior of the debt restructuring of the company to the new delisting rules,which provides strong practical significance for the implementation of the delisting system of China’s securities market and the healthy development of the securities market.At the same time the implementation of the new delisting rules not only helps to accelerate the removal of backward enterprises,but also has a great restraining effect on ST companies and promotes the healthy development of China’s capital market.