On The Failure Of IPO In The Perspective Of Related Party

For Chinese corporates,because of the low IPO adoption rate of the domestic stock issue “approval system”,the opportunity to obtain IPO approval and successfully log on to the exchange is a scarce resource.The success of IPO can broaden the financing channels of corporates,enhance the visibility of corporates and provide exit opportunities for shareholders to realize capital appreciation,which brings a series of benefits to the sustainable development of corporates.At the same time,with the continuous development of the capital market,the related party transactions between corporates are becoming more and more common,and the number of related party transactions is rising.The use of related party transactions to transfer benefits to meet the listing conditions is also endless.Therefore,in the process of corporate IPO,related party transactions and related information disclosure is one of the key contents of the CSRC's audit,and it is also the main reason for the failure of corporate IPO.Therefore,from the perspective of related party,it is of practical significance to study the failure of corporate IPO.First of all,this paper clarifies the path of the IPO failure caused by the related party transaction problem by combing the related theories of related transactions and IPO failure related documents and related transactions.Secondly,this paper uses the case study method to take the failure of Fortune Energy IPO as an example to analyze the problems and causes of its IPO failure.The study found that the related party problems that led to the failure of Fortune Energy's IPO were reflected in four aspects: first,the company had unreasonable related party transactions;second,there was a large amount of capital borrowing between related parties,for example,the related parties raise funds through the issuance of bills without real trading background,and the unpaid borrowing between related parties;third,the related party guarantees increase the financial risk;fourth,there is the extracorporeal circulation of funds and the transfer of benefits.Then,this paper analyzes the causes of the above problems and finds that there are four main reasons for these problems: first,the company's financial situation is not good;second,the actual controller's moral hazard;third,the corporate governance structure is ambiguous;Fourth,the company's internal control is flawed.Finally,this paper puts forward the following suggestions for the proposed IPO corporate from the perspective of related party in view of the failure of Fortune Energy IPO: first,improve the working capital management ability of the corporate from the aspects of financial control ability,financial management concept and financial personnel quality;second,evade the moral hazard of the actual controller;third,it can improve the corporate structure by improving the shareholding structure,strengthening the core functions of the board of directors,and introducing professional managers;fourth,controlling the internal business environment and related business activities related to related transactions And internal supervision to strengthen the internal control of corporates.The innovations of this paper are mainly reflected in two aspects.First,this paper enriches the research objects of related party transactions.The current research objects of related party transactions are mostly listed companies,lacking relevant research on IPO companies,and this paper will be the research object of IPO corporates.Second,this paper sorts out the path of the IPO failure caused by related transactions.At the same time,there are limitations in this article.Due to the limitation of case company information disclosure,this paper is not comprehensive and in-depth to analyze the problems and causes of its IPO failure.