A Case Study On Financial Fraud Of Shandong Xinlv Food Company Limited

In recent years,with the rapid economic growth,the development of China’s capital market is becoming more and more prosperous.At the same time,more and more small and medium-sized enterprises have been exposed to a variety of problems after going public.International scholars,however,tend to be for financial fraud of listed companies and other large enterprises to study and explore,mostly focus on assembled in the main board,the gem or small and medium-sized plate,in contrast,for the NEEQ market attention of enterprise financial fraud is lower,and the NEEQ market as to the unlisted small and medium-sized enterprise solve the financing difficulties of trading places,has now become a vital part of domestic capital markets.This article selected case study of Shandong Xinlv food co.,LTD.,the company listed on the NEEQ market in December 2015,and the securities and futures commission in June 2019 received the administrative penalty,publicly listed company applied for shares transfer disclosure file exists in the process of falsehoods,disclosed in 2015 annual report is false or disclosure of the interim report is false or company information disclosure of big shareholders equity pledge not according to stipulations,etc and be punished,including Xinlv shares actual control Chen sent markets off-limits for life,this is the NEEQ market first,Therefore,this case is a typical case of financial fraud in the NEEQ market.This paper adopts the method of combining theoretical analysis and case analysis.The theory part expounds the definition of financial fraud,the motivation of financial fraud,corporate governance and other related contents.In the case analysis part,it first introduces the basic situation of Xinlv shares,the process of financial fraud events and the means adopted by Xinlv shares in financial fraud.Secondly,the GONE theory is used to analyze the financial fraud of Xinlv shares.Specifically,starting from the four factors of greed,need,opportunity and exposure,it is found that the motivation of financial fraud of Xinlv shares mainly includes the low moral level of relevant managers and controllingshareholders.The need to achieve performance targets due to the signing of a bet agreement;The major shareholder of the company wants to pledge the equity;The ownership structure is unreasonable;The company’s internal governance is not perfect,the board of supervisors in virtual;The market information disclosure requirements of the NEEQ market are not strict,the cost of violation is low,and the punishment is insufficient.Finally,through the analysis of the motivation of financial fraud of XinLv shares,this paper proposes targeted solutions and suggestions from four aspects,including: further strengthening the information disclosure of enterprises,and proposing that the NEEQ market should make strict and detailed requirements on the information disclosure of listed enterprises;Improve the internal governance of the company,reduce the greed of the management,strengthen the moral level of the management and corporate culture;To reduce the opportunities for enterprises to engage in financial fraud,such as improving the company’s internal control system,rational decentralization of equity structure,so that the rights of shareholders can restrict each other;Reduce unreasonable and improper needs of enterprises,such as reasonable setting of performance objectives,the establishment of risk control system,etc.;Enhance the possibility of exposing illegal behaviors of enterprises,such as increasing the penalties for illegal behaviors,and forming a deterrent to enterprises.It is hoped that the research of this paper will help identify and restrict the financial fraud of listed companies on the NEEQ market,so as to further strengthen the management of the NEEQ market,protect the interests of investors,improve the overall qualification level of enterprises,and improve the efficiency of resource allocation in the NEEQ market.