Case Study On Violation Of Information Disclosure By Protruly Company

To a certain extent,the securities market is a place for information trading,and timely,accurate,and adequate information disclosure can improve market efficiency.Market investors make investment decisions based on the information disclosed by listed companies,and listed companies,as providers of information,obviously have more real and comprehensive information and are in an advantageous position in transactions.However,due to insufficient professional competence and ethics of relevant personnel,listed companies often disclose false information or inadequate and timely disclosure.This will undoubtedly exacerbate information asymmetry between the supply and demand sides of the information and mislead investors' decision making behavior.At the same time,it suffered loss of profits,but also damaged the reputation and image of the company and disrupted market order.In recent years,in order to improve the accounting information disclosure system in China,many regulatory documents have been issued,and relevant departments have also strengthened supervision and management of listed companies' violations.However,due to a variety of reasons such as internal control defects,irrational internal governance structures,and inadequate external supervision,listed companies' accounting information disclosure violations have occurred from time to time.Therefore,specific cases can be used to study the illegal disclosure behavior of listed companies,to deeply explore the reasons for violations,and to get corresponding enlightenment.Protruly is called Jiangsu Baoqianli Video Technology Group Co.,Ltd.,and completed the reorganization and listing of the backdoor Zhongda shares in 2015.In August 2017,the company was punished by the CSRC for fraud in the reorganization process.Not long after that,in December 2017 Protruly received the investigation notice of the Securities and Futures Commission again for suspected information disclosure violations.Through more than one year of investigation,it was found that Protruly has conducted a large number of related party transactions under the leadership of its chairman Zhuang Min since listing,and none of them have been disclosed.At the same time,there are undisclosed large external guarantees and large Shareholders' shares were judicially frozen.Protruly will be punished again by the China Securities Regulatory Commission for violations of information disclosure.It is precisely because of this violation that the company's stock price has created more than 30 records of daily limits in the A-share market.Some intermediaries have also been punished.Cause serious adverse effects on the securities market.This article sorts out some relevant literature and theories,and combines Protruly's annual report,internal control audit report,and announcements issued by the Securities Regulatory Commission to conduct a detailed analysis of Protruly's information disclosure violations.First of all,an in-depth study of the reasons for the violations.Through analysis,it can be found that the motivation of the violations is very single,that is,the controlling shareholder embezzled the interests of the listed company.However,the reasons for this behavior to be implemented are multiple: the equity structure is unreasonable,Bad corporate culture and flawed risk assessment procedures;independent directors fail to function and supervisory boards are ineffective;controlling shareholders and senior directors and supervisors lack professional ethics,intermediary agencies are not diligent and perform their duties;loopholes in government supervision,and too little punishment.Then,based on the reasons for the violations,from the perspective of the company itself and the outside of the company,we get inspirations for improving the quality of corporate information disclosure.