Research On Risks Of Vie Model Enterprises’Return To A Shares And Their Prevention

Since the 1990 s,due to the failure of the A-share market to meet the rapidly growing financing needs of domestic enterprises,many small or medium-sized company in emerging industries have gone to the United States to be listed,and they are known as Chinese concept stocks.However,due to the consideration of sovereignty or ideological control,the Chinese government restricts overseas investment themes to invest in many domestic fields such as telecommunications,media,and technology.When equity control is restricted,the overseas listing of Chinese stocks is usually accompanied by the establishment of a VIE structure To achieve agreement control on domestic operating entities.However,the hot Chinese stock market did not last.The short selling crisis of Chinese stocks in 2010-2012 and the bull market in the A-share market in 2014-2015 triggered a large-scale delisting of Chinese stocks to return to the domestic capital market.With the implementation of the CDR(Chinese-style Depositary Receipts)pilot in 2018,the return of China’s stocks has gradually become a hot issue in the domestic capital market.The research shows that the huge returns brought by the successful return of Chinese stocks are often accompanied by considerable risks.Based on this economic background,this article focuses on the risks and preventive measures of VIE model companies’ regression.First of all,based on previous studies,this paper briefly analyzes the overview of China’s stock return,and selects "China’s stock returns successfully to the first." For example,through the literature research method and case analysis method,the focus is on the risks faced by regression and its risk control measures.The risks of Focus Media’s return are mainly reflected in the risk of class actions in the process of privatization,the risk of debt repayment of privatized funds,the dismantling of legal and tax compliance risks in the VIE structure,the risk of control transfer,and the risk of shell selection in the process of backdoor listing 2.Risks that performance commitments fail to meet standards.Then use the risk management model to analyze the risk management measures of Focus Media from three levels of risk identification,risk assessment,and risk response to explore the shortcomings of Focus Media’s risk management.The study found that Focus Media had inadequate risk management measures in the privatization,deconstruction of the VIE model,and the backdoor listing process: the price of the offer was unreasonably increased during the privatization process,the cost of delisting was increased,and the information disclosure was not rigorous,which led to legal proceedings;the VIE structure Gradient debt financing during the dismantling process reduced the risk of debt repayment but increased the pressure for re-listing;insufficient legal investigations in the backdoor process forced the use of alternatives,unreasonable performance commitment design,but profit through earnings management Accurate compliance.Finally,it proposes targeted solutions to the shortcomings of the case company’s risk management,in order to provide a certain reference for the VIE model enterprises to be returned.