| With the rapid development of the domestic capital market,more and more companies are seeking IPOs for financing.However,the high barriers to entry have turned many companies out,so they turned to seek backdoor listings.In 2008,the China Securities Regulatory Commission introduced performance commitments for the first time in major asset reorganizations,and performance commitments have been widely used in backdoor listings.However,performance commitments have gradually exposed potential risks and drawbacks: cases of falsely high valuations,accurate completion of performance targets,and performance turning over after the end of the commitment period have emerged one after another,causing losses to listed companies and shareholders.Therefore,when a listed company signs performance commitments,it should do a good job of risk management to protect the rights and interests of the listed company and its shareholders.This paper constructs a performance commitment risk management system,and selects the case of Huanrui Century’s backdoor SMI joint listing for specific application analysis.First of all,this paper uses business flowchart analysis and hierarchical holographic modeling to identify the risk factors that exist in each stage of performance commitments.External risk factors include political factors,economic factors,and legal factors.Internal risk factors include target selection and agreement terms.,Business decision-making,implementation of contract performance,and the development of risk factors to restore more specific risk scenarios.Based on the identified risks,this paper further analyzes the sources,characteristics and nature of risks,and proposes general management and control strategies from six aspects: risk taking,risk aversion,risk transfer,risk conversion,risk hedging,and risk compensation.Next,this paper reviews the case of Huanrui Century’s backdoor SMI joint listing,using the aforementioned framework,and specifically identified 8 risks.The risks mainly come from the operating characteristics of the film and television industry,the limitations of agreement terms,and the short-sightedness in business decisions.Behaviour and over-radicality,and potential legal proceedings caused by pledge of the promised party’s equity.Finally,this paper proposes risk prevention countermeasures based on the perspective of listed companies.For the risk of target selection,carefully select the reorganization object and timing,and do due diligence;for the risk of agreement clauses,the value of the target asset should be reasonably evaluated,and diversified assessment indicators should be adopted to increase the flexibility of agreement clauses;for business decision-making risks,reasonable performance should be formulated Commitment goals,improve the supervision of the management;for the implementation of the contract,consider adding restrictions on the restricted shares,clarify the responsibilities of both parties for breach of contract and specific guarantee implementation measures.The innovation of this paper is to build a performance commitment risk management system,and apply the hierarchical holographic modeling method and business flowchart analysis method to the risk identification process.In addition,H&R Century is a well-known company in the film and television industry,and its case selection is representative.This paper selects film and television companies as a research on performance commitment risks in backdoor listings,enriches the research results in this field,and also provides some references for other listed companies to help them cope with potential risks in performance commitments and take effective preventive measures. |
