Research On Stakeholder's Protection Mechanism Of Listed Company From A View Of Financial Fraud

In China, listed companies only have a history about ten years, though they have been developing very rapidly. There are around 1300 listed companies until April 2004.They occupy an important place in the national economy. However, due to various reasons, laws and regulations don't keep pace with the step of economic development and many problems have emerged, particularly, the negligence and encroachment of the rights and interests of stakeholders have occurred frequently. To a certain degree, all of such problems restrict the development of the securities market.Stakeholders always support companies' development and assume the risk. They are maybe natural persons or social organization, such as creditors,employees,suppliers,consumers,community,government. Listed company can't shunt aside the interests of stakeholders. Every stakeholder may be very important, but it does not mean they are equally important to listed company. According to the possibility of the corporation and thread with the company, the stakeholders can be split into four types: support,not support,margin and mix. The company takes different strategies to each stakeholder. Company cannot live and develop if it isolates itself from stakeholders. So, the company must take up the social responsibility to protect stakeholders' interests. By analysis the existed situation, we find that our country has pay close attention to stakeholders, more and more protections have been published by law. But from the incident of financial fraud in the securities market, we find that there has faultiness in the stakeholders' protection mechanism.This article is concemed with the protection of stakeholders' rights and interests in financial fraud of listed company. On the base of referencing abroad experiences, considering sufficiently special condition of our country, this thesis bring forward a more operationally interests protection mechanism. The protection mechanism has two parts. Firstly, minority shareholders, creditors and employees must participate into corporate governance, supervision and control company's actions, especially financial behaviors. Then they can protect themselves interests. Next, supervisions,rules and regulations must exert a great effect. CSRC,intermediary and media have to make up of a system in three dimension. This system can supervise company's actions. The best step is punish persons,organizations which involved in financial fraud and pay necessary compensate to stakeholders in time when fraud has been exposed. Of course, in order to make the protection mechanism more available, all circles of social must offer a roof garden to make it more efficient. It contains essential supportive measures, such as supporting a legislative authority for stakeholders in order to take part in corporate governance, supervise supervisory organs, consummate common pleas,compensation system, andso on.The research methodology of this paper is the combination of theory and practice. Following the consecution of general theory to actual practice, combining theoretical derivation and real cases, this paper discussed actuality and solution to the problem about stakeholders' interests in our country. The topic is difficult to be perfect. Still, it is the humble hope of the author that this article can shed some light on the issue of protection of stakeholders' rights and interests.