The Warning Study Of ST Risks Of Listed Companies Based On The Perspective Of Equity Structure And Internal Control

Since the early 1990s,the Shanghai Stock Exchange and the Shenzhen Stock Exchange was founded,academics and practitioners has been troubled by the problem that how to supervise these listed companies.It produced a ST system in 1998,the corresponding delisting system have emerged,however,due to the delisting standards are not strict enough,and complicated procedures,there are some company that could not retreat or back problems subside on the market.In order to solve this problem,with the joint efforts of academics and practitioners,it unveiled " two programs " in 2012and " a number of opinions "in 2014,the new delisting policy released on October 17,2014,it was known as" the most stringent delisting system in history",under this system,listed companies launched a an upsurge of delisting in 2015.Facing to such situation,ST companies worry about their fate,poor performance of non-ST companies are facing that how to make the company to circumvent ST.the problem about ST how to turn the tide turned the corner at the last minute and the poor performance of non-ST companies how to evade risk worth exploring.Based on the above background,the paper selected 68 ST companies between 20]3-2015 for the first time to be special treatment and 68 non-ST companies in the same industry with the same period and the size of and ROE less than 3%the second year before treatment as the study sample,equity and quality of internal control features as the focus,using Logistic regression to construct a warning system model(T-2)contains financial indicators and internal indicators and equity characteristics indicators,the model modeling back to judge the accuracy of the sample rate of 83.93%,the test samples forecast accuracy rate of 87.5%.On the other hand,the empirical results show the following conclusions:(1)adding equity feature index and the quality of internal controls improved the prediction accuracy of the model,it proved equity indices and internal control indicators has some contribution to predict risks that poor performance companies enter the ST segment;(2)internal control index and the actual control of property' coefficient is negative,it indicates that they are negatively correlated with the probability of ST,and it proves effective internal controls can help reduce ST risk and those actually controlled by state-owned institutions are more likely to receive government support;(3)the proportion of the largest shareholder was a weak positive correlation with the probability that company was special treatment,it support the tunneling theory that tunneling of major shareholders are likely to make the company into financial difficulties.The main contribution of this paper are:First,to provide recommends for companies to averse ST risk;Second,to help investors making correct decision.