External Supervision In IPO Fraudulent Issuance

The approval-based IPO system in China has strong political characteristics,its original intention is to evaluate the quality of listed companies and exclude the unqualified company with bad purpose from the IPO gate.However,there is no doubt that the Commission has no enough ability to guarantee every approval accurate,so the majority of investors naturally consider that the approval IPO companies have great corporate governance and good operating performance,sometimes the interest of investors will be greatly damaged.Wan Fusheng Health,Tianfeng Energy,Xin Tai Electric and other IPO financial fraud companies frequently harm the interests of the majority of investors,indicating that the information disclosure of listed companies in China is still at a low level.The information disclosure of listed companies in China still need to be improved,with the background,the introduction of the new delisting system is widely praised by investors.In this paper,the first case of Xintai Electric,which is forced to withdraw from the market due to the fraudulent issuance,is selected as the research object.Based on the relevant literature theory,this paper analyzes the beginning and end of Xintai Electric's fraud and the external supervision.The results of the study show that the external supervision to listed companies has an irreplaceable role in all regulatory methods,and the administrative supervision is the most effective;the kind of listed companies which had very serious violations are vulnerable;Administrative supervision will bring a negative impact on the share price of listed companies,and the supervised companies tend to have a negative market reaction;external supervision mechanism can effectively protect the interests of investors,appropriate guidance to external supervision can promote its more effective role.By analyzing the role of external supervision mechanism,this paper puts forward some suggestions on how to reduce the fraudulent behavior of listed companies and protect the interests of investors.