Research On The Legal Issues Of Executive Absence In GEM Listed Companies

In2009, China GEM was set up in Shenzhen Stock Exchange, but the GEM in grate hopedidn’t present what people expected. Since November2010, as the first locked-up stocks havebeen unlocked, the focus has been that GEM companies’ executives have decreased the companyshares for cash. For four years, GEM companies’ executives frequently decreased the companyshares. The trend of the shares decrease is obvious, and the time of the shares decrease isconducted precisely. Resignations become the first choice of enforce shares decrease. The sharesdecrease conducted by executives for cash disobey the original intention for establishing the GEM,influence the GEM market, and damage the investors’ benefits. The frequent shares decreaseconducted by executives mean flaws in the relevant laws and regulations, which appears in poorregulation in executives shares decrease under high estimate, single rules in share decreaselock-up period, lack of layers construction, finite function of information disclosure, short ofdisclosure time limit, and loss of supervision from sponsors. The defects and leak in relevant lawsand regulations hide troubles in executives shares decrease and promote these activities. Thus, theauthor suggests that China GEM should draw lessons from the relevant legal system experience ofoverseas GEM, reform the new stock pricing mechanism further, reduce the IPO threshold,eliminate the premise of the shares decrease among GEM executives, promote the establishmentof multi-level locking phase rules, perfect the information disclosure regulations, fulfill theresponsibilities of sponsors, standard the executives shares decrease behaviors in the GEM listedcompanies, and promote the growth of enterprises.