Study On The Backdoor Listing And Tunneling Between Baoqianli And Zhongda Shares

Backdoor listing is an important way for companies to go public.Since the listing conditions are more simple than the direct public offering,the quality of the assets and profitability of the companies are uneven,and the listing motivation is often not simple.Even in the enterprises that operate well after the backdoor listing,the controlling shareholders' tunneling has occurred from time to time.Therefore,this paper selects typical case and analyzes the events of Bao Qianli through the case study method,hoping to provide some reasonable suggestions for the effective management of this phenomenon.Bao Qianli was listed on the backdoor in April 2015.In July 2017,Bao Qianli was investigated by the China Securities Regulatory Commission for fraudulent listing and the company's shares were suspended.In November of the same year,the Jiangsu Securities Regulatory Bureau issued a notice stating that Bao Qianli had the actual controller occupying the company's funds,and constituted a related party transaction.The company's internal control system has major defects.On December 29,2017,Bao Qianli resumed trading and became a ST stock.The stock price fell for 29 consecutive trading days,creating a continuous down limit in the A-share market.Bao Qianli has only been in the market for three years since it was listed by the controlling shareholder,and the company's post-listing development momentum is good.The controlling shareholder Zhuang Min's share of 37.30% is theoretically not high.In this case,the company is still encroaching on a large number of assets,which is relatively rare in the capital market.This paper mainly studies and analyzes the case from the following three aspects.(1)Analysis of the motivation of the controlling shareholder to tunneling.This paper believes that there are two main reasons for the tunneling motives in this case: First,the assets injected by Zhuang Min,the controlling shareholder of Bao Qianli,have fraudulent behavior in the process of borrowing,and the purpose of seeking listing is not simple.Second,the company's internal control mechanism is flawed.Therefore,the controlling shareholder can successfully modify the company's articles of association and provide favorable conditions for the smooth implementation of short selling.At the same time,the regulatory authorities have insufficientpenalties for violations of laws and regulations,and cannot effectively stop the implementation of short-selling behavior of controlling shareholders.(2)Analysis of the specific ways by which the controlling shareholder tunneling.In this case,Zhuang Min,the controlling shareholder of Bao Qianli,mainly encroached on the interests of listed companies through illegal guarantees,huge foreign investment and a large amount of prepayments.At the same time,the controlling shareholder also concealed his illegal activities by making false disclosures.(3)Analysis of the economic consequences caused by backdoor listing and tunneling.Analysis of the market performance,company operation and financial performance of the company after the listing and tunneling behavior,this paper finds that Bao Qianli has performed well in the market performance and business performance after the listing of the backdoor.However,after the company experienced tunneling,the company's value has shrunk dramatically,production and management have stagnated,and small and medium-sized investors have suffered heavy losses.Through these analysis,this paper proposes to strengthen the motives for controlling the tunneling of the company from the source to curb the motive of the controlling shareholder's tunneling;At the same time,improve the corresponding external supervision system and the internal control mechanism of the company,and increase the punishment for violations.