Case Study: Risk Management Of Listed Companies In VIE Mode

The VIE mode is also known as the protocol control mode.The purpose of adopting this mode is to circumvent the country's restrictions on foreign investment in certain industries and the complicated approval procedures.Due to the many restrictions on the listing of A shares,some companies with good growth had to turn to overseas listing financing.Generally speaking,Chinese companies listed on the US capital market will be referred to as Chinese stocks by investors.In 2015,China promulgated the Foreign Investment Law(Draft).On March 15,2019,the Second Session of the Thirteenth National People's Congress passed the Foreign Investment Law of the People's Republic of China,starting on January 1,2020.Execute.The law is slowly filling the gaps in the supervision of the VIE model for many years.The road of overseas fund-raising for Chinese companies has become increasingly difficult.Some companies have begun to split the VIE structure.Companies such as Storm Technology and Qihoo 360 have gradually returned to China.Go public.Based on this phenomenon,we should clearly see the risks of the VIE model,and also recognize the importance of the risks of the VIE model to the enterprise.Therefore,a correct analysis of the risks of listed companies under the VIE model is of great significance to Chinese companies that are now and going overseas.This article studies the risk management of listed companies in the VIE model,using a case analysis method.The article mainly selects Alibaba which retains the VIE structure and Qihoo 360 which dismantled the VIE structure among the companies listed in the VIE model for a typical case study.It also analyzes and analyzes the key risks of companies listed in the VIE model with related similar companies.Combing.This article believes that,under the current legal background,if companies continue to maintain the VIE structure,the first type of risk they may face is industry-specific business compliance risks caused by changes in laws and regulations;the second type of risk is the continuous change of the external environment,which may As a result,the actual controller has corporate governance risks such as breach of contract.To deal with the former,enterprises must carefully understand and sort out relevant laws and regulations,and achieve legal operation and maintain legal industry operating qualifications.For the latter,they must control and improve a series of control agreements signed.To solve.On the other hand,if the VIE structure is dismantled in the current legal context and turned to domestic listing,this article believes that the main risks should include risks such as capital risk,foreign exchange risk,and how to achieve compliance listing in the country.Enterprises should follow the steps prescribed by law.The demolition will be carried out gradually,and then the domestic listing will be considered,and each of the key links and the full set of processes will be controlled to minimize the various risks that may occur.Through the review and analysis of typical cases in this article,I hope to provide a theoretical reference for listed companies in the VIE model to consider whether to continue to maintain the VIE structure in the face of changes in the external legal and regulatory environment.