Research On Non-associated Behavior Of Related Party Transactions Of Pre-IPO Companies

Since the reopening of IPOs in 2014,the number of queuing companies has proliferated,among which there are many enterprises with excellent textures,but there are also many companies with mixed fish,especially in the case of concealed transactions and other means to manipulate profits and seek listing.According to the official statistics of the China Securities Regulatory Commission,a total of 199 IPO companies will be elected at the meeting in January-December 2018,of which 59 will be rejected,18 will be cancelled,and 10 will be suspended.Among the 59 companies that were rejected,one of the core reasons was that there were 43 related transactions and business independence doubts,accounting for 72.9%.It can be seen that the necessity and fairness of related party transactions have become one of the most important issues of concern to the CSRC.The question of whether to use the non-associative means of related party transactions to evade supervision and achieve listing financing is also the key review direction.In fact,the SFC’s unusual cautiousness about connected transactions is a cause.At this stage,a large number of unfair related party transactions seriously damage the interests of small and medium shareholders,jeopardizing the integrity of the entire capital market,resulting in investors’ willingness to invest,affecting the effective allocation of scarce resources,not conducive to the entire securities market and the national economy.The healthy development,therefore,requires comprehensive governance and supervision of the related transactions of the listed companies,and all of this is based on an in-depth analysis of the non-related behaviors of related transactions of listed companies.Therefore,this paper combines theory with case,first analyzes the motivation,specific implementation path and influencing factors of the non-associated means of using connected transactions in the past five years,and then analyzes the specific case of failed IPO of Shunbo Aluminum Corporate.Why do companies in a specific environment implement non-related behaviors of connected transactions,and what are the key factors that affect their behavior?Finally,it is found that in recent years,listed companies have preferred to use related parties in order to manipulate their profits to obtain listing qualifications and evade supervision.The two methods of associating and concealing interests conceal the related transactions,and the internal governance mechanism such as the proportion of independent directors,the concentration of shares,the quality of information disclosure,as well as the penalties of regulations,the effectiveness of regulatory mechanisms,and the influence of media reports,etc.By affecting the cost of non-associated behavior of connected transactions,it becomes the main factor affecting this behavior.Finally,in view of the key factors affecting the non-related behavior of connected transactions,the relevant governance suggestions are proposed from the aspects of internal governance and external governance,thus reducing the fraudulent behavior of listed companies and making the capital market develop in a healthy and orderly direction.