China Listed Companies To Raise Funds To Regulatory Research

The supervision of the domestic listed companies proceeds is a main component part of security market regulation. At present, a main evidence of irregularities in the operation of listed companies in China is the abusive use of proceeds, which is also the top potential cause of damage to the benefits of the investing public. Through a rich narration of how the proceeds are generally invested, this article has come to the conclusion that listed companies tend to invest proceeds in projects other than those cited in the prospectus due to changing business environment, problems plaguing during the fund-raising process, inadequate effort in corporate governance, distemperedness of supervision and the lack of relevant laws and regulations.Precautionary measures this article discusses include stepping up demand on listed companies when disclosing information on proceeds investment, improving corporate governance, and institutionalizing the supervision systems. Other remedies this paper suggests are to give lump some approval once but break placement into phases when raising funds, enhance the standards of re-raising funds, and encourage underwriters and sponsors so they will play a big role in supervising the use of proceeds.The analysis of two cases is given at the end of the paper.