Why Is The A Stock Market "Zombie Enterprise" Rigid And Immortal?

Recently, Xiao Gang, chairman of the securities and Futures Commission, said that Listed company The delisting system is an important basic system in the capital market, and the normalization of the delisting system should be realized step by step. Next, we must strictly implement the new delisting system and maximize the efficiency of resource allocation in the capital market. The normalization of the delisting system proposed by Chairman Xiao has shown the attitude of the regulatory authorities. This newspaper intends to organize a series of in-depth reports around the normalization of the delisting system to explore the obstacles to the implementation of the delisting system and how to normalize the delisting.

Recently, the chairman of the securities and Futures Commission Xiao Gang said that the delisting system of listed companies is an important basic system of the capital market, and the normalization of the delisting system should be progressively realized. Next, we must strictly implement the new delisting system and maximize the efficiency of resource allocation in the capital market.

It is a basic principle for developed capital markets to withdraw the listed companies that have lost the listing conditions, but it is difficult for the A share market. A large number of "zombie companies" with caps are rigid and die. The A share market has become an embarrassing situation of "harder to come and harder to go out", which has always been criticized by the market.

"Delisting system is an important mechanism to ensure the survival of the fittest in the market, and also an important means of correct allocation of resources in the stock market. For a long time, China's stock market is hard to come and harder to come out, and to a certain extent, it hinders the function of market pricing and resource allocation." Li Daxiao, chief economist of British securities, said in an interview with reporters.

According to the latest statistics, as of March 16th, the total number of A share listed companies was 2537, but the total number of entrepreneurs in Shanghai and Shenzhen two cities was 88, while the underperforming enterprises were 50 less than those who had been delisting due to continuous losses, accounting for less than 2% of the total number of A share listed companies. From this point of view, the implementation of the delisting system is still a long way to go.

So, what causes these enterprises that are on the verge of delisting can always "linger", so that A shares can not form a pool of live water?

Absence of investor protection system

"Under normal market conditions, if we want to get high returns, we should have psychological preparation for high risk, which is the principle of buyer's conceit in market competition." Yi Xianrong, a researcher at the Financial Research Institute of the Chinese Academy of Social Sciences, said in an interview with reporters that if the legal supervision system is tight enough to ensure that small and medium investors invest in Listed Companies in a market full of information integrity and without fraud, the loss of investors caused by the deterioration of the financial situation and performance of listed companies should be borne by investors themselves.

"But in fact, the failure of some listed companies is not caused by market failure, but mainly because of the corruption and big business operators. Shareholder Violation and other reasons. If such a listed company goes bankrupt or delisted, and transfers the risk of the stock market entirely to the innocent small and medium investors, that is, let the small and medium investors bear the risks that are not really brought by the market. Once this happens, will there be any reason why the small and medium-sized shareholders do not actively fight? "Yi Xianrong said.

Li Daxiao believes that the main reason for the difficulty of delisting is that the delisting may cause greater social shock. "From the perspective of investors, regulators and market mechanisms, these three aspects are not yet ready for delisting. First of all, investors have not been accustomed to the entry and exit of listed companies. They always feel that once they are listed, they will not withdraw from the market, and the psychology does not set up corresponding expectations. Secondly, similar to the establishment of bank deposit insurance system, the listed companies will have a greater risk if they withdraw from the market, and regulators have not yet established the corresponding insurance system for subsequent delisting, such as investor protection system. Finally, the stock issue registration system has not been realized yet, and the A share market IPO is relatively difficult for listed companies, which makes the listed companies become scarce resources, resulting in a situation that the market is in short supply. The company is not easy to go public, if the cost of delisting is very large, so this is also a reason for the difficulty of delisting. "

Botnet companies like loopholes

A broker who declined to be named told reporters that the securities law is mainly based on the requirements of information disclosure in the case of continuous losses in the past three years. The possibility of manipulating profit standards is relatively large, and the delisting procedures are longer in time. Although some ST companies are not doing well in their main business, operating difficulties and narrow profit channels, they can still get a "short-lived" profit by selling assets, financial subsidies and bank interest free measures, so that they can easily get rid of the loopholes and make them easy to get rid of the risk of delisting.

According to the reporter, some listed companies make use of the loopholes in three consecutive years of loss, and carry out the "212" operation in the annual report, that is, two consecutive years of losses, third years through financial manipulation and other means to reverse the profit and loss, and then for two consecutive years of losses, and to turn losses into profits, so as to avoid delisting risks. As data show, *ST China A, in the 16 years from 1997 to 2012, had a full 12 years in a loss, the only 4 years of profit were small profits, as of the end of 2012, net assets per share has been negative 3.10 yuan.

"It is impossible to solve the difficulty of delisting from the perspective of the difficulty of delisting." Prior to this, Central University of Finance and Economics professor He Qiang told reporters that the withdrawal of the market is difficult and the listing system is closely related. Before 1998, the issuing system was the examination and approval system. There were many problems, especially the serious fraudulent practices of listed companies. Later, after the introduction of the securities law, the problem of excessive packaging of listed companies still existed. Once a listed company is listed, investors are bound to think it is a good company because it has been examined strictly by the Commission.

"If a listed company needs to delisted because of fraud, it will become very difficult to deal with. If you don't remove the cards, you can still. transaction Investors still seem to have a glimmer of hope. If the cards are removed, they will lose everything. He Qiang said.

Entanglement of interests of local governments

"There is another very important reason." Yi Xianrong pointed out that because all listed companies are subordinate to all levels of government, the withdrawal of local listed companies will not only damage the achievements and image of the politicians, but also will cause great losses. In order to ensure the full utilization of the shell resources of the listed company, the local government will make full use of its authority to continuously injecting its social resources into the listed companies that are facing the delisting. Under the guidance of local governments, asset restructuring has become a common mode for listed companies to lose their profits in recent years, that is, to replace high-quality listed companies that are on the verge of bankruptcy. "This will not only preserve the qualification of the local enterprises, but also preserve their good image."

Reporters learned that Chang nine biochemical announced in November 4, 2011, Jiangxi SASAC agreed to grant its operating financial subsidies totaling 160 million yuan, the financial subsidies recorded in 2011 profit and loss, directly led to the year *ST Chang nine turn losses into profits.

Yi Xianrong believes that once the listing of enterprises, local governments have formed many vested interest groups related to listed companies. If delisting, it is bound to affect a series of sensitive issues such as honor and disgrace, economic interests and future resettlement. Therefore, it will be very frequent to use this vested interest relationship to oppose the withdrawal of listed companies, which will naturally be delisted. mechanism The implementation has increased numerous difficulties.