Alienation Of Backdoor Motivation Under The Background Of Registration-based Stock-issuing System Reform

The continuous promotion and final implementation of the the Registration-based Stock-issuing System(RSS)is an important measure of China’s capital market reform in recent years.For a long time,China’s stock issuance has implemented the approval-based system,which has led to the distortion of resource allocation in the capital market,and many enterprises with good asset quality have turned to backdoor listing.Under the reform of Registration-based Stock-issuing System,the number of backdoor listing companies in China’s capital market has decreased sharply,but some enterprises still choose backdoor listing,which is worthy of attention.Before the opening of the STAR market,Transsion Holdings tried to backdoor the Shimge Pump Industry Group(SPIG);After the opening of the STAR market,Transsion Holdings gave up backdoor listing and chose to IPO on the STAR market instead;Under the background of the continuous promotion of the reform of the RSS and the opening of the STAR market,Tianshan Aluminum Group(TAG)still chose to backdoor the SPIG to finally achieve listing.Using this group of related cases,this research studies the impact of the change of issuance system on the motivation of backdoor listing,and investigates the alienation of the motivation of backdoor listing in China’s capital market under the background of RSS reform.On the basis of analyzing and summarizing the existing theories,this research believes that the backdoor listing motivation in the capital market has duality and divides the backdoor motivation into two categories:IPO opportunity cost avoidance and IPO compliance cost avoidance.Combined with the case analysis,it is found that before the RSS reform,avoiding the opportunity cost caused by the time-consuming and uncertain IPO is the main motivation for Transsion Holdings to choose backdoor listing;After the reform,due to the characteristics of transparent listing process,fast listing speed and marketization of IPO pricing,the speed advantage of backdoor listing is no longer,so Transsion Holdings abandoned backdoor listing and turned to IPO on the STAR market;However,the RSS reform did not significantly reduce the threshold of IPO.Due to the duality of backdoor listing motivation,TAG still chose backdoor listing,even under the background of RSS reform,in order to avoid the high environmental compliance cost of IPO.The research shows that the improvement of listing efficiency brought by the reform will greatly weaken the backdoor motivation of IPO opportunity cost avoidance,but it will not affect the backdoor motivation of IPO compliance cost avoidance.Under the RSS,the phenomenon of backdoor listing in China’s capital market is likely not to disappear but will change on the aspect of motivation.The enterprise backdoor motivation will be alienated from the avoidance of IPO opportunity cost to the avoidance of IPO compliance cost.This means that some enterprises with worse asset quality,lower level of information disclosure and higher risk of environmental violations will achieve the purpose of listing through backdoor.Under the policy trend of loose supervision of backdoor listing in China,it will bring new challenges to capital market supervision and investor protection.This research puts forward a theoretical framework of cost avoidance to analyze the motivation of backdoor listing,discusses the alienation of the motivation of backdoor listing under the background of China’s Registration-based Stock-issuing System reform,and explains the changes and reasons of the number of backdoor listings in China before and after the reform.This research has a certain value for a deeper understanding of the behavior of backdoor listing and strengthening the supervision of capital market.