Case Study Of Forced Delisting Of La Chapelle

With the continuous development of the reform and opening up,the capital market in the national economy continuously climbing.The rapid growth of economic scale leads to the original delisting system in our country can not meet the development needs of capital market.Therefore,our country accelerated the reform and construction of the delisting system of listed companies.We began to put the delisting system in the first place of constructing the basic system of capital market.But for a long time,our country delisting system reform does not grasp the key of enterprise delisting.Some of the problem enterprises avoid supervision by non-legitimate means such as modifying financial data and backdoor restructuring,so as to retain listing qualifications,affecting the sustained development of the capital market.2020 delisting new rules captures the key part of our country’s delisting system reform,simplified the delisting process,and comprehensively revised financial indicators,major illegal and trading delisting rules,marking a new period for the construction of our country’s delisting system.In recent years,the scale and number of delisted enterprises in China have gradually increased.Based on this background,this paper conducts a case study on the selected enterprise--Xinjiang La Chapelle Apparel Co.,LTD.(hereinafter referred to as "La Chapelle")through case analysis,statistical induction and qualitative and quantitative analysis methods,and analyzes the reasons for its forced delisting.La Chapelle is the giant of Chinese garment industry and the first garment enterprise supported by double share(A+H)in Chinese capital market,which has strong universality and representation.At the same time,the problems of unbalance of internal governance structure,failure of formulating development strategy and low level of fund risk management that La Chapelle shows in the process of delisting are also the universal problems of listed enterprises in our capital market.Therefore,the study and analysis of the case of La Chapelle compulsory delisting can warn listed enterprises to strengthen internal control,carefully make business strategy and improve the risk management of funds.At the same time,the problems exposed in the process of La Chapelle delisting can also indirectly promote the perfection of the delisting system in our country.Through qualitative research method,principal component analysis method,Z-Score model and other methods,this paper studied and analyzed the operation and financial condition of La Chapelle in recent years and drew the following conclusions:(1)The surface reason for the forced delisting of La Chapelle was that its performance plunged,resulting in negative net assets at the end of the period for two consecutive years and the audit report with reservations was issued.(2)The deep reasons for forced delisting of La Chapelle include: the imbalance of internal governance structure leads to the concentration of corporate power,the failure of development strategy formulation leads to the performance crisis,and the low level of fund risk management leads to the debt crisis.(3)Based on principal component analysis and Z-Score model,it is found that the financial risk of La Chapelle has increased year by year since 2019 due to the decline of financial indicators such as operating revenue and net profit,which leads to the delisting outcome.(4)La Chapelle compulsory delisting has caused a variety of effects.On the one hand,La Chapelle compulsory delisting causes its own financing channel to narrow and damaged the legal rights and interests of some investors,on the other hand,the problems exposed in the process of La Chapelle compulsory delisting also indirectly promoted the perfection of the delisting system of our country.Based on the above research,this paper summarizes the enlightening effect of the forced delisting case of La Chapelle from multiple perspectives,as follows:(1)Listed enterprises should improve the internal governance structure,improve the capital supervision ability,optimize the equity structure and make a reasonable distribution of power.At the same time,enterprises must reasonably formulate corporate development strategies according to the market and their own conditions,avoid capital shortage caused by aggressive expansion strategies,and maintain the debt scale and current debt ratio in a reasonable range.(2)Investors should continuously improve their own investment ability,strengthen the importance of the effectiveness of enterprise internal governance,avoid blind investment to safeguard their own rights and interests.(3)Regulators should learn the lesson of La Chapelle delisting,strengthen the supervision of enterprise internal governance structure and information disclosure,and constantly improve the supporting system of enterprise delisting.