Case Study For Forced Delisting Of *ST Xinyi

Since its establishment,China’s capital market has gradually matured and standardized after long-term development.The delisting system is the basic system in the capital market,which standardizes the process of listed companies withdrawing from the capital market,alleviates the capital pressure of the capital market,promotes the optimal allocation of resources,and maintains the order of the capital market.Since 2012,China’s delisting system has undergone four major reforms,established four types of mandatory delisting index systems,including financial,transactional,normative and major violations,and set up a risk warning version to reveal delisting risks and ensure the smooth implementation of the delisting system.In 2020,after the introduction of the strictest new delisting rules in history,companies continued to be forced to delist because they touched the red line,and while the number of listed companies continued to increase,the number of delisted companies was also increasing.The situation of “only entering but not leaving”of listed companies in China’s capital market has been broken,“shell companies” have been cleared out of the market,the market delisting ecology has been improved,and China’s capital market is gradually forming a normalized delisting mechanism.At present,there are relatively few case studies on the forced delisting of listed companies in China,*ST Xinyi,as the first listed company in A-shares to be forced to delist by the Shanghai Stock Exchange due to multiple financial fraud in 2022,has been listed for 23 years,with frequent violations of laws and regulations,seriously damaging the interests of the company’s shareholders and investors,disrupting the order of the capital market,and the social impact is very extensive.*The forced delisting of *ST Xinyi shows the “zero tolerance” of China’s regulatory authorities for financial fraud,the determination to purify the capital market environment and eliminate “zombie enterprises”.Therefore,this dissertation selects the case of *ST Xinyi forced delisting for research to explore the reasons for its delisting and draw suggestions and enlightenment.First of all,this article introduces the overview of *ST Xinyi,including the company profile,governance structure and operating conditions,and sorts out the process of *ST Xinyi’s forced delisting,including from being implemented delisting risk warning to being forced to delisting.Secondly,the external and internal reasons for the forced delisting of *ST Xinyi were analyzed,including the slowdown in the growth rate of the industry market and the tightening of the regulatory environment for forced delisting;Internal reasons include the decline in the company’s operating capacity,the chaotic internal governance structure,and the improper implementation of the business strategy.From the perspectives of the company itself,investors and the capital market,the impact of the forced delisting of *ST Xinyi was analyzed,including the reduction of the company’s financing ability and the loss of corporate value;Damage to investors’ interests and undermine investor confidence;Promote the optimal allocation of resources and promote the improvement of the delisting system.Finally,summarize the suggestions and enlightenment of *ST Xinyi forced delisting.*ST Xinyi should improve its management capabilities,improve its corporate governance structure,and prudently formulate business strategies;Listed companies should strengthen internal governance,improve the quality of operations,and improve the timeliness and completeness of information disclosure;Investors should establish correct investment concepts and enhance professional judgment ability;Regulatory departments should strengthen the supervision of information disclosure and improve the delisting system.This dissertation can provide reference for other listed companies to prevent delisting risks,remind investors to invest rationally,promote regulatory authorities to improve the delisting system,promote the optimal allocation of capital market resources,and improve the vitality of the capital market,which has a certain enlightening effect.