A Case Study Of Yongmei Holdings Bond Default From The Perspective Of Corporate Governanc

In recent years,China’s bond market has achieved rapid development,and the scale of bonds has ranked second in the world,and has also become the second largest bond market in the world.With the expansion of the scale of the bond market,the service capacity to serve the real economy is continuously enhanced.Although the bond market pattern of mainly serving state-owned enterprise financing and economic development policies has been broken,and the function of the bond market has gradually returned to the essence of capital financing,the long-formed "rigid payment" and the inertia of certain implicit underwriting of state-owned enterprise defaults make investors still have "state-owned enterprise faith".However,after 2020,the liquidity risk of state-owned enterprises was gradually exposed,and there were successive incidents of default of bonds of state-owned enterprises,such as Yongmei Holdings,which could not be repaid in time due to maturity.As the backbone of China’s economic development,the large concentration of bond defaults by state-owned enterprises far exceeds the expectations of regulators and market players and has a huge impact on the healthy operation of China’s bond market,which urgently requires a systematic study and targeted recommendations on bond default risk management and prevention and control.It is true that the reasons for the bond default of state-owned enterprises may involve the influence of the external environment,but the root cause of the bond default of state-owned enterprises may still be the internal factors such as the poor financial condition of their own enterprises,blind investment expansion and poor management.If we further trace back to the source,the much-criticized corporate governance problems of state-owned enterprises may be one of the key factors for the bond defaults of state-owned enterprises.Based on the analysis of internal and external default factors,this paper focuses on the causes,consequences and countermeasures to prevent the material default of the ultra-short-term financing bonds of Yongmei holdings,a wholly state-owned enterprise,from the perspective of corporate governance.The case study of this paper shows that:(1)Non-corporate governance factors,such as the slowdown of macroeconomic growth,the impact of COVID-19,the recession of the industry and the poor operating conditions of the company,have increased the possibility of default risk of Yongmei Holdings’ bonds.(2)Internal corporate governance problems,such as imperfect corporate governance structure,internal control mechanism and information disclosure mechanism,have affected the investment and financing decision-making behavior of Yongmei Holdings and accumulated default risk of bond subjects.(3)Dereliction of duty and other external corporate governance problems of rating agencies,underwriters and audit institutions lead to increased information asymmetry and weaken the external governance effect of external investors.Therefore,in view of the disadvantages of internal corporate governance of state-owned enterprises,it is suggested to further deepen the mixed ownership reform of state-owned enterprises to optimize the corporate governance structure,improve the internal corporate governance mechanism,strengthen the information disclosure mechanism and other measures to improve the internal corporate governance level of state-owned enterprises.At the same time,we can improve external corporate governance and prevent and reduce default risk by clarifying the supervision responsibilities of regulatory agencies,improving the evaluation efficiency of rating agencies,implementing the responsibility of bond underwriters and improving the audit quality of audit institutions,so as to promote the high-quality development of corporate governance and bond financing.