| Since the introduction of China’s capital market,gambling agreement has gradually been widely used in China.At present,there are many enterprises using the gambling agreement in our country.In terms of the final result of gambling,there is case of success,but more is of failure in the end.In 2013-2017,the rate of non-compliance commitments of listed companies in China soared from 10.67% in 2013 to 28.74% in2017.For gambling enterprises in failure often face the risk of losing control of the enterprise and are trapped into equity disputes and even litigation dilemma.The signing of the gambling agreement will undoubtedly have a profound impact on the interests of both sides.Investigation and analysis show that in recent years,the failure rate of inter-enterprise gambling remains high,but the gambling agreement that seems to protect investors’ own interests is not.As an incomplete contract,the current overall mechanism arrangement still has defects and greater risks.Therefore,making in-depth analysis of the potential risks in the process of signing gambling agreements and putting forward comprehensive risk prevention and control measures for the relevant risks is conductive to help equity investment enterprises in the signing of gambling agreements reasonable set the terms of the agreement,and ultimately achieve a win-win situation between the investment and financing sides.The paper takes the gambling agreement between Nations Technologies Inc.and Shenzhen Sinuo Carbon Material Co.Ltd as a case.Through reviewing and summarizing the relevant literature on the establishment of performance commitment and compensation in the acquisition transaction,this paper introduces the specific concept,main content and theoretical basis of the gambling agreement,and briefly analyzes the main drivers and possible risks of the gambling agreement embedded in the acquisition and reorganization of listed companies.In terms of case studies,this paper analyzes the basic situation,specific causes,implementation process,specific content and performance of the gambling agreement of the two parties to the equity acquisition transaction.Combined with charts and financial data,the paper focuses on the analysis of the equity acquisition of gambling agreement after the failure of the cause performance and its reasons.Shenzhen Sinuo Carbon Material Co.Ltd failed to meet its promised net profit in 2018 and 2019 and the margin is widening,leaving Nations Technologies Inc.with a large impairment of goodwill in accordance with the relevant regulations.In the course of this equity acquisition,due to the "false high" forecast of the profitability of the acquired assets,resulting in a certain irrationality in the setting of performance commitment indicators themselves,and the actual performance of the acquisition target cannot reach the forecast level,resulting in the situation that performance commitment was ultimately not successfully fulfilled.In the end,this paper draws corresponding conclusions based on the above analysis and puts forward some constructive suggestions for applying gambling agreement to the Acquisition of Chinese Enterprises.The main conclusions of this paper are: the reasonable valuation of the underlying company and the improper valuation method are the main reason;In order to better play the positive role of performance commitment,the company should pay attention to the following issues in the equity acquisition agreement:(1)setting appropriate performance targets and betting provisions is the prerequisite for achieving a win-win situation for gambling;(2)carefully selecting the target of the acquisition to avoid blind acquisition;(3)multi-dimensionally assessing the value of the acquired party is conducive to avoiding the risk of gambling;and(4)establishing a liability system. |
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