Case Analysis Of Xintai Electric Company Compulsory Delisting

The GEM market,also known as the second edition market,was established in2009 and plays an important role in the securities market.It can provide financing opportunities for small and medium-sized enterprises that fail to list on the main board.By the end of 2018,more than 700 companies have successfully listed in the second board market of China,with a total market value of 4194.295 billion yuan and a circulation market value of 2549.133 billion yuan.Compared with A-share motherboard,GEM's listed companies are smaller in size,and its access threshold is lower,so the stock price is easy to be manipulated.In addition,it is more difficult for the listed companies to withdraw from the market and the executives to cash in.At present,the stock registration system and the stock creation board have been put on the agenda,and the delisting system revised in 2014 is also conducive to the healthy development of the securities market.Foreign mature GEM markets,such as NASDAQ,have established relatively perfect systems in risk control and protection of the rights and interests of small and medium-sized investors.However,China's measures to protect small and medium-sized investors are slightly inadequate.The loss caused by compulsory delisting of listed companies to shareholders is very serious,especially some small and medium-sized shareholders with less rights and responsibilities.If their rights involved are not protected properly,they will lose confidence in the market.Therefore,compulsory delisting is particularly important for the improvement of the compensation system for small and medium-sized shareholders.This article mainly through the case form,from Xintai Electric listing,counterfeiting,delisting,compensation for small and medium shareholders in the order of analysis of the first GEM listed company forced delisting.The article is divided into five parts.The first part mainly introduces the background and environment of the case.The second part summarizes the compulsory delisting system,standards,procedures and the theoretical basis of compensation for minority shareholders.The third part introduces the case of compulsory delisting of Xintai Electric,including the basic situation of Xintai Electric,the process of listing and delisting and the compensation events.The fourth part first analyses Xintai Electric's fraudulent issuance means and the plight of small and medium shareholders' compensation,then compares the handling of Hong Liang's international fraudulentissuance by the Hong Kong Securities Regulatory Commission;the fifth part mainly analyses the suggestions to the regulatory authorities and relevant parties.This paper finds that the Mainland Securities Regulatory Commission(CSRC)is insufficient in protecting the rights and interests of minority shareholders,and that minority shareholders encounter many obstacles in the process of applying for compensation.Mainland regulators should simplify the litigation process,sponsor agencies should maintain independence,and small and medium investors should maintain a rational investment concept.