A Case Study On Involuntary Delisting Of "Boyuan Investment"

The company's listing and delisting is equally important to make a healthy stock market.Only improve the delisting system of listed companies,can guarantee the quality of the listed company,make the action of the securities market to optimize resource allocation is able to perform.Although there are relevant delisting rules in "securities law",the delisting rules is hard to operate.This make the number of delisted companies is less than listed companies and investors have wrong feeling that every listed companies will not be delisted.In 2014,the SFC issued “Several opinions of the delisting system of listed companies to reform and improve and strictly implement due to the serious illegal compulsory delisting rules”.Whether this rule would increase the steerability of delisting of listed companies? It's worth to think that the reasons of involuntary delisting of listed companies and the consequences of involuntary delisting."Boyuan Investment"(600656)is the first company to be involuntary delisted after the rules of 2014.This cause heated debate in society."Boyuan Investment" is one of the oldest listed companies in China,and survive several times.This case study will make "Boyuan Investment" as the object,and use literature research and case study analysis to study.Through the case study,we can draw enlightenment to other stakeholders.The first chapter of this case study will firstly comb the research of involuntary delisting literature.The second chapter will introduce "Boyuan Investment" from its historical evolution,the ownership structure and financial conditions,than describe the process of delisting and its result.The third chapter will analysis the internal and external reasons of involuntary delisting of "Boyuan Investment".The internal reasons are false pay for share reform performance pledge,profit manipulation and imperfect internal control.The external reasons are the illegal exposure is hard to find,cost of the financial fraud is low,and the defects of the system of regulation of listed companies.And analyze impact of company and investors after delisting.Finally we make the opinion that the government should increase the supervision of information disclosure of listed companies,increase compulsory delisting system operability,innovating the mechanism of protection of the right of investors;the listed companies should undertake its social responsibility,establish a reasonable corporate governance structure;the investors should set up the correct values and understand their own risk preference.