Research Of The Motives And Consequences Of Information Disclosure Irregularities Of Listed Companies On GEM

Against the backdrop of the global subprime crisis,the listing of China’s Growth Enterprise Market(GEM)in 2008 provided a financing platform for high-tech SMEs to gain more room for development,and the implementation of the new securities law in 2020 marked the clearer direction of the reform of the registration system,with the disclosure system based on the principle of information disclosure focusing more on safeguarding the economic interests of external investors.However,the development of the securities market is changing rapidly,and the information disclosure violations of listed companies are becoming more and more hidden and bad,which seriously damage the stability of the market and the legitimate rights and interests of investors.It is of great practical significance to study the disclosure irregularities of listed companies.GEM is characterized by low listing standards and high board risk compared to the main board.As most of them are SMEs as well as high-tech enterprises,their internal control systems are not perfect.When information disclosure violations occur,although the violations are less egregious,they involve a wider range of violation types and more obvious means.This paper analyzes the current situation of information disclosure violations in GEM in five dimensions:(1)The types of violations are mainly focused on delayed disclosure,and there are many concurrent violations in the violating companies.(2)Violation means are specifically focused on high-level major decisions and fulfillment procedures,and insider trading behavior also accounts for a large proportion,which indicates that the internal governance system of GEM companies is generally less effective.(3)By industry,the violating companies are mainly concentrated in the manufacturing industry,especially the high-tech enterprises with light assets,which are less difficult to violate and more concealed.(4)By region,the number of violating companies is higher in Jiangsu and Beijing,where the economic level is higher;while the proportion of violating companies is larger in less developed regions such as Xinjiang and Yunnan.(5)The types of punishment in GEM are mainly focused on criticism and warning,with fines only as an auxiliary means.(hereinafter referred to as "CDS")as a case Research,and analyzed the violation situation in depth and in detail,and analyzed the motive and reasons for the violation by combining theories of information asymmetry and corporate governance.Through the analysis,it was found that the motive for the violation of the disclosure of information was the reversal of the abnormal fluctuation of the share price to the business performance.The main reasons for the disclosure violations are the internal and external governance deficiencies,which are manifested in the imbalance of the company’s internal governance system and the weak functional effectiveness of each department;the lack of professional ethics of top management;the auditor’s failure to exercise diligence and lack of independence;and the relatively small cost of violations.To this end,this paper argues that GEM information disclosure should be improved from the following aspects:(1)raising the cost of information disclosure violations,strengthening the rights of the exchange,and appropriately decentralizing administrative units to give more initiative to the market and investors.(2)Establishing integrity and punishment mechanisms,improving the appointment system of auditors,and strengthening the management of auditors.(3)Rationalize the use of media monitoring function and form an external regulatory system of government-mediator-media.(4)Improve the professional ethics of management as well as strengthen the construction of internal management culture system.(5)Introduce professional investors to weaken the phenomenon of "dominant shareholding";raise the status of independent directors,establish an evaluation body for independent directors,and ensure that the shareholders’ meeting cannot obtain both nomination and election rights;strengthen the functions of the supervisory board and provide regular training for supervisors to improve their professional competence.Compared with large enterprises,SMEs themselves are more vulnerable to internal system imbalance,imperfect legal system and non-transparent environment.It is hoped that this paper will provide useful suggestions for the prevention and governance of disclosure irregularities for listed companies represented by China Submarine Co.and provide references for government regulators,auditors and the supervision and implementation of internal control of listed companies as well as the governance of disclosure irregularities.