Zero veto becomes a case of historical veto

 Zero veto becomes a case of historical veto

On the other hand, there has been a marked change in the trend of the audit of science and technology innovation board in recent years. The first company that is not registered by the SFC and rejected by the Listing Committee of the Shanghai Stock Exchange has appeared one after another, and the trend of the audit is becoming more and more clear.

Some companies are facing the critical pressure of feedback return expiration.

The previous batches of companies applying for listing on GEM concentrated before April 10, that is to say, as of September 9, in addition to the time occupied by some processes and other situations, enterprises still in the stage of examination and inquiry will face considerable time pressure. According to the data from the Shanghai Stock Exchange, there are 56 enterprises in the inquiry stage, of which up to 8 enterprises applied before April 10.

The Shanghai Stock Exchange anticipates that the audit cycle of a science and technology start-up board enterprise will be between 6 and 9 months. At present, the earliest batch of enterprises applying for approval has approached 6 months. If the time taken to supplement the semi-annual report is not long, then the exchange will continue to ask questions and the enterprise can not complete the inquiry within the prescribed time, the enterprise will probably terminate this trip of listing on the GEM. A person from the investment banking department of a large securities firm in Beijing told reporters.

Take Danghong Technologies as an example, the companys application materials were accepted by the Shanghai Stock Exchange on March 29, and the first inquiry was sent by the Shanghai Stock Exchange on April 12. At present, the company updated the content of the fourth feedback response on September 3. Although the company has been postponed for a period of time due to the supplementary semi-annual report (on July 31, when Danghong Science and Technology stopped auditing the supplementary semi-annual report, on August 22, the company has completed the data update of the semi-annual report), if the Shanghai Stock Exchange continues to ask questions, the time left for Danghong Science and Technology is very urgent.

Recently, due to the supplement of the semi-annual report data, many enterprises have stopped responding to the rhythm of feedback. The Business Guidelines stipulate that the suspension of auditing, the authority to request, and on-site inspection shall not be counted within the prescribed time limit of the preceding three months. Therefore, supplementing the mid-report data becomes a good opportunity for some enterprises to breathe. As of September 9, nearly 40 enterprises had suspended auditing because of supplementing the semi-annual report data, according to the reporter.

However, some market participants feedback that some enterprises have been delayed in disclosing the data of the semi-annual report, which does not rule out the suspicion of delaying the progress of audit.

Some enterprises have a long period of time to supplement the semi-annual report. In principle, sponsors will prepare in advance. It is a normal time period to complete the update in one month. Therefore, many enterprises have been unable to make the semi-annual report. It is not excluded that updating the semi-annual report data is an excuse for delaying time. The aforementioned Beijing investment bankers believe that.

However, even if enterprises use the supplementary reporting time to postpone the inquiry and response, it can only play a postponed role in the case of clear expectations of the current audit cycle.

Zero veto is history

In addition to the time pressure of feedback response, recent changes in audit wind direction also bring considerable pressure to the enterprises under review.

Hengan Jiaxin is the first company to be rejected by the Securities Regulatory Commission because of its weak accounting foundation and lack of internal control.

After Hengan Jiaxin, the Shanghai Stock Exchange rejected Guoke Huanyus application for listing at the 21st Review Conference on the grounds that the issuers affiliated transactions accounted for a relatively high proportion and the business development depended heavily on the affiliated parties; it did not meet the requirements of business integrity and independent market-oriented sustainability; and the issuer applied for the first time. It fails to fully disclose the business model of major special research undertakings, the disclosure of related parties is omitted, and the information necessary for investors to make value judgments and investment decisions to issuers is not fully disclosed.

Many market views hold that the CSRC does not agree with the application for registration of enterprises approved by the Shanghai Stock Exchange Listing Committee, which conveys many important signals.

The aforementioned investment bankers in Beijing told reporters: From the results of the audit, at the beginning, the SCM listed Committee passed the audit of Hengan Jiaxin, and the SFC has the problem of information disclosure in this audit of the company. The registration system emphasizes information disclosure as the center, so why did the SCM listed committee not find any problems at the beginning? This may need to absorb experience and lessons.

With the first company rejected by the listing committee, many market participants believe that the regulatory logic of the CSRC from strict review has been transmitted to the end of the Listing Committee of the Shanghai Stock Exchange.

For a long time, the markets view on the registration system has been zero rejection rate of the listing committee. Some market participants believe that at this stage, most of the enterprises with problems are stuck in the inquiry process. However, the recent rejection of listing applications by the SFC and the exchanges means that even those enterprises that have passed the inquiry and even the examination by the listing committee are still unsafe, and this is the signal of the stricter examination.

Source: Yang Qian_NF4425, Responsible Editor of Economic Report in the 21st Century