Research On Performance Commitment And Earnings Management In Zhongtian Energy’s Backdoor Listing

With the continuous development and improvement of China’s capital market,"backdoor listing",a special form of merger and reorganization,has gradually become one of the most important ways for enterprises to land in the capital market.At the same time,in order to protect the interests of minority shareholders and safeguard the interests of both parties,the performance commitment system was first applied to mergers and acquisitions in 2008.However,in practice,the negative impact of performance commitment system gradually emerged.In order to pursue the high premium of merger and acquisition,the backdoor party will choose to overestimate the value of the transaction assets,thus being forced to make difficult profit forecast targets in the performance commitment.In the performance commitment period,in order to avoid triggering a high performance compensation mechanism and maintain a good image in the capital market,the backdoor party will manipulate the earnings data of listed companies by taking advantage of its position as a controlling shareholder under the background of asymmetric information.This behavior will not only disrupt the listed companies’ development plans after the performance commitment period,but also adversely affect the normal operation of the market economy.Therefore,it is of great theoretical and practical significance to study the performance commitment and earnings management behavior of backdoor listed companies.This paper selects the case of Zhongtian Energy Backdoor Changbai Group to analyze and discuss the earnings management methods used by the backdoor during the performance commitment period by using the methods of literature research and case analysis.First of all,it introduces the application status of performance commitment in backdoor listing,points out the significance,framework and method of this research,summarizes the relevant concepts of backdoor listing,performance commitment and earnings management combined with the research process of domestic and foreign scholars on performance commitment and earnings management,and elaborates the relevant theories supporting this research in detail and comprehensively based on this.Secondly,it introduces the background of both parties,the motivation of the transaction,and the plan and completion of the performance commitment in the backdoor listing of Zhongtian Energy.Based on this,it analyzes and summarizes the internal and external motivation of the lending parties to implement earnings management.Then,it preliminarily identifies the earnings management behavior during the performance commitment period of Zhongtian Energy by means of the modified Jones model,and futher uses the financial identification method and non-financial identification method to support the analysis.On this basis,quantitative analysis and qualitative analysis are used to analyze the impact of earnings management on listed companies,small and medium-sized investors and creditors during the performance commitment period of Zhongtian Energy.Finally,the author puts forward some feasible suggestions on standardizing the application of performance commitment in backdoor listing from the three dimensions of regulatory authorities,enterprises and intermediaries,including improving the management mechanism of backdoor listing,optimizing the design of performance commitment scheme and improving the earnings management behavior control system.Based on the above analysis,the following conclusions are drawn:in the backdoor listing process of Zhongtian Energy,the existence of performance commitment benefits both parties of the transaction in the short term;The high performance commitment and high expectations in the capital market prompted Zhongtian Energy to implement earnings management during the performance commitment period;The earnings management behavior has affected the profit level of Zhongtian Energy in the later period,and caused the loss of the interests of small and medium-sized investors and creditors.As the phenomenon of "performance shock after commitment period" is common in a large number of mergers and acquisitions cases,and a large number of empirical documents have confirmed the existence of earnings management within the performance commitment of enterprises,the above suggestions are universal.