Case Study Of Senior Managements' Reduction In Chen Xin Technology

In recent years,the steady development of China 's capital market has injected strong vitality into enterprises,but there have been a number of violations and reductions that have disrupted the market.The reduction of shares on the one hand harmed the legitimate rights and interests of the majority of small and medium investors,on the other hand it disrupted the order of China's securities market.Constructing a perfect shareholding reduction system for listed companies is particularly important to ensure the healthy development of the capital market.In recent years,the CSRC has continuously issued relevant regulations to restrict the reduction of shareholdings of major shareholders of listed companies.On May 27,2017,the CSRC issued the "Several Regulations on Highly Reduced Shares of Listed Company Shareholders and Directors and Supervisors." The market will be further regulated.However,compared with the foreign capital market,the relevant laws and regulations of China's securities market are still in the perfect stage.The major shareholders of listed companies may still use legal loopholes to obtain excess income through capital operation due to information advantages and their own profit-seeking ideas.Under normal circumstances,the reduction of major shareholders is allowed by law,but even under normal circumstances,the reduction of shares will have a certain negative impact on stocks.Ordinary investors judge the business development of the company from the behavior of the majority shareholder's reduction of shareholding,and make corresponding operations,which will affect the stock price.Therefore,the reduction of the majority shareholder will,to a certain extent,lead to increased volatility of the company's stock price,and will seriously affectthe company's future development and sustainable operation capabilities.This article selects Dalian Chenxin Network Technology Co.,Ltd.(abbreviated as Chenxin Technology,the same hereinafter)as a research case.Chenxin Technology's performance and stock prices began to decline after two reductions in 2015 and 2016 and the transformation in2016.After the completion of the reduction,Chenxin Technology continued to pass positive information to the market and merged with hot-sector companies to increase share price reduction,which had a negative impact on corporate operations and the stability of the capital market.In 2016,the actual controller of Chenxin Technology was investigated and dealt with by law enforcement agencies for allegedly manipulating the market.Based on the review of domestic and foreign literatures,this article uses case study and event research methods to define the case of family business,China's listed company major shareholder holdings,profitability,and market response and impact.Through the analysis and research on the motivation,timing and impact of the reduction of the major shareholders of Chenxin Technology,the countermeasures and recommendations based on the company,regulators and ordinary investors are drawn,and the future outlook is put forward.