Case Study Of *ST Hangtong’s Voluntary Delisting

The "Company Law" promulgated on December 29,1993 stipulated for the first time the standards for delisting of listed companies and the decision-making power of delisting.In the following two decades,the delisting system of listed companies in China had undergone several reforms with diversified the delisting system had been continuously improved.However,due to the scarcity of shell resources in China,and there are still listed companies that keep repeating "caps" and "removals",it is not conducive to the construction of a benign ecology of the capital market.A new round of "New Rules for Delisting" was announced by the Shanghai and Shenzhen Stock Exchanges on December 31,2020,marking a new step in the reform of the delisting system.In this context,on the evening of January 8,2021,*ST Hangtong announced that the company would choose to voluntarily delist,voluntarily withdraw all stocks traded on the Shanghai Stock Exchange,and transfer to the National Equities Exchange and Quotations for listing after the delisting was completed.*ST Hangtong became the first company to apply for voluntary delisting after the release of the new delisting regulations at the end of 2020.Studying the process of why *ST Hangtong went to the brink of delisting,why it chose to delist voluntarily,and the impact of voluntary delisting,could provide feasible experience to other listed companies,and could further optimize delisting for relevant government regulatory authorities system for reference.Starting from the domestic and foreign literature,this paper focuses on the domestic and foreign research progress and achievements on delisting and voluntary delisting,and introduces the basic terms related to delisting,and briefly describes the theories used in this study.Next,this paper describes the company profile of *ST Hangtong and the process steps of voluntary delisting.After a detailed analysis of the case,it is found that the internal motivation for the company to choose to delist voluntarily is that the company’s improper M&A decision leads to a further sharp deterioration of the financial situation of the already poorly managed company.The external motivation is the company’s consideration of the macro laws and regulations,the new delisting system encourages voluntary delisting,and the fierce competition in the external industry.Then it analyzes that the path of its voluntary delisting is to conduct voluntary delisting through the resolution of the shareholders’ meeting,which is based on the concentration of its own equity.And the paper compares with other companies that delist voluntarily in their choice of delisting paths.Finally,it is analyzed that the cash option given by *ST Hangtong’s choice of voluntary delisting has brought a protective effect to investors’ rights and interests,as well as a positive impact on its own development.*ST Hangtong’s decision to delist voluntarily shows its responsibility as a central enterprise,and it is also the result of its comprehensive consideration of multiple factors.Combining the results of case analysis,this paper draws some enlightenment: Listed companies should actively enhance the market competitiveness of their main business,expand and develop cautiously,improve the corporate governance system,and reasonably choose the exit method in difficult situations.For the regulatory authorities,it is necessary to further optimize the delisting system,establish a diversified exit mechanism,and protect the interests of small and medium investors.Investors themselves also need to make reasonable judgments and investments.