Protection Of Minority Shareholders Equity In M&A Of NEEQ Market

The New National Equities Exchange and Quotations(NEEQ)is an important part of China's multilevel capital market.As a financing platform for small and medium-sized enterprises,it promotes public entrepreneurship and innovation and has made great development in recent years.By the end of December 2017,the number of companies listed on the NEEQ has exceeded 10,000.But with the expansion of the market,there are problems such as poor liquidity in the market and lack of financing function etc.,so mergers and acquisitions(M&A)becomes an important prerequisite for the institutional investors and shareholders in NEEQ.Because of the valuation of companies in NEEQ is relatively low,there have been a large number of M&A by the listed companies.But NEEQ's short established time makes the system of protecting shareholders is not perfect.The controlling shareholder of the listed companies is “the only one big share” and made the internal governance of the companies lose effectiveness,and caused many cases about infringement of rights and interests of small and medium shareholders.Under the background of the stratification of NEEQ,as well as the related theories of M&A and investor protection,this paper takes the failure of Jinlitai acquired listed company Yincheng Media in 2016 as an example,analyses the main reasons of infringement of the rights and interests of minority shareholders in the M&A in the aspects of internal governance and external supervision,and finds the main reasons are : the big shareholders' “local IPO”,imperfect internal governance,the pricing mechanism of M&A of NEEQ is unreasonable,and the information disclosure system of NEEQ is incomplete.Then this article gives some suggestions on the internal governance and external supervision.