A Case Study Of Focus Media Dismantling VIE Architecture

2015 is particularly important for the Chinese concept share enterprises.In this year,Focus Media Corporation successfully dismantled the Variable Interest Entities and returned to the domestic capital market by Qixi Holdings.At the same time,some domestic enterprises supported by foreign funds gradually turn to privatization and want to reappear in the A-share market,such as: Shanda Group?Giant Interactive Group etc.Today,Chinese concept share enterprises,which are dismantling and want to dismantle the Variable Interest Entities,have reached more than 100.And the market of dismantling the VIE is expanding.However,As the characteristics of the VIE is difficult to dismantle and the enterprises are faced withe many difficulties when they start to do demolition work.The factors are not only the architecture itself,but the constraints of the relevant national policies.The establishment of the VIE is packing interleaving.There are many stakeholders,what's more the agreement is cumbersome and complicated.Each mistake of any part may affect the dismantling of the entire VIE and lead to the failure of the returning to the domestic capital market.This article in the theory mainly used the methods of analysis of the actual case.After reviewing a large number of related literatures,we explored the case that Focus Media returned to the domestic capital market by removing the VIE,which based on each process of dismantling the VIE.It further revealed the drivers of the VIE's dismantling by the CCS enterprises,and clarified the various problems that the CCS enterprises may face while dismantling the VIE.It also expounded the risks that may be encountered in the process of dismantling the VIE and put forward relevant case revelation.This successful case,Focus Media,is really a lessons for those whose future intention is to dismantle the VIE and return to the A shares,which provide a theoretical basis and operating model.This study found that,first,the removal of VIE architecture in the process as much as possible will then set the ability of foreign shareholders interests and RMB funds into consideration,a let the old and new shareholders will not be disappointed with the equity transfer price as soon as possible;second,according to the characteristics of the enterprise,innovation of financing channels,to strictly consider each kind of financial risk is the premise of the development of the best financingplan;third,after the return to the right main market planning;fourth,select the listing section can not deviate from its own characteristics;fifth,optimize the demolition of VIE architecture style,the relevant tax cost is minimized;sixth,the cross-border transfer of equity,to strictly abide by the relevant laws inside and outside the system,to avoid unnecessary litigation.