A Case Study Of Par-Value Delisting For Sinovel

In China’s securities market,the efficiency of the delisting system has been low.Many Junk stocks are tied up in the market,which is not conducive to the healthy development of the market.Recently,the par-value delisted companies have increased,this standard is expected to be one of the important means to eliminate junk stocks,how to realize the normalization of delisting is worthy of our attention.I studied the case of Sinovel’s face value delisting.Sinovel set the record for the highest issue price in 2011 and ranked first in China’s wind power industry.In fact,it soon began to go downhill and repeatedly lingered on the verge of delisting,but it managed to avoid the crisis of loss-profit delisting and face value delisting until 2020.The tortuous delisting process of Sinovel indicates that there are loopholes in China’s delisting system.Analyzing Sinovel’s behavior of avoiding two kinds of delisting standards can help us to perfect the delisting system.Firstly,this paper introduces the Development of Sinovel.Sinovel was warned many times.Further case analysis found Sinovel’s long-term financial crisis and low share price.However,the delisting rule can not play a role all the time.The reason is that Sinovel manipulates the numbers by saling of accounts receivable,using accounting estimate,relating party transaction with the help of the early warning period of delisting.But under the parvalue delisting system,it’s difficult to avoid because of the high cost of buying back shares,the frequent occurrence of bad news and the deterioration of the company’s outlook,in the simplified delisting process,Sinovel did not escape the fate of delisting.Finally,according to the delisting regulation in December 2020,this paper puts forward some suggestions on the optimization of delisting index,the perfection of supervision measures,supporting system and Minority shareholder decision-making.The conclusions are as follows: First,Sinovel used earnings management to manipulate financial figures to achieve the effect of avoiding delisting.Second,the par-value delisting standard played the capital market governance function,reflected the will of the shareholders,became the important supplement of the loss delisting.Sinovel shares of the difficulty of manipulating the effect is not good.Third,the daily supervision of the regulators plays an important role in revealing the motives of the companies to avoid delisting,so that investors can know the real situation of the companies in a timely manner.Fourthly,the simplification of delisting procedure is helpful to the improvement of delisting efficiency.The study provides enlightenment for the capital market to give full play to its governance function,provides reference for the minority shareholders to make correct investment decisions,and is helpful for the construction of the normal mechanism of delisting as soon as possible.