What does the new third board mean by backdoor listing?

The New Third Board will become the biggest policy dividend in China's capital market. If you don't go public, the enterprise will miss a golden opportunity. Although the listing requirements of the New Third Board are not high, the listing time is short and the listing speed is fast, the regulatory authorities have always stressed that enterprises do not need to backdoor listing on the New Third Board. However, due to their own qualifications, historical evolution, time of establishment, listing cycle and other factors, some companies still choose to go public by backdoor. Of course, in April this year, the share transfer system said that in the review of mergers and acquisitions or major asset restructuring of listed companies, it will be consistent with the listing access link to avoid regulatory arbitrage. Under normal circumstances, there are two ways for enterprises to borrow money from the New Third Board: First, they gain control by acquiring the equity of the New Third Board enterprises, then purchase new assets through assets+additional equity, and then sell the original assets through reverse mergers and acquisitions; The second way is for the buyer to participate in the issuance of listed companies, inject cash, acquire the controlling stake of the company, sell old assets and buy new assets.

Compared with the main board, the advantage of buying a new three-board shell is that it can buy 100% of the shares (at least two acquisition entities can be separated), so it can be injected into the follow-up business (generally, buying a main board shell can't hold more than 30% of the shares (or trigger a tender offer), so the business can't be injected, otherwise it can only be shared by other shareholders of the listed company. The disadvantage of this operation is that the time is slow, and the original assets or some customers may not be able to complete the transfer, which will affect or delay the subsequent business development or higher-level capital operation (selection or listing). In practice, some projects are directly injected with assets after the transfer of control rights, which leads to the review of major asset restructuring.

We should also pay attention to the following legal issues in the backdoor acquisition scheme of the New Third Board: In the backdoor acquisition scheme, the acquirer should meet the provisions of Articles 3 and 6 of the Provisions on the Management of Investor Suitability in the National Equity Transfer System for Small and Medium-sized Enterprises (Trial) and be qualified to participate in the directional issuance of shares by listed companies. The acquisition of shell companies has led to changes in the actual control rights of new third board enterprises. According to Article 18 of the Measures for the Administration of the Acquisition of Unlisted Public Companies, after the acquisition is completed, the purchaser becomes the largest shareholder or actual controller of the company according to the model of listed companies. After the completion of the acquisition 12 months, if the purchaser holds the shares of the target company, it may not transfer them. The actual controller after the change shall make corresponding commitments. The acquisition is a major asset reorganization and needs to be approved by relevant government departments.

Announcement on the acquisition after the completion of the follow-up planned acquisition (adjustment plan of the company's main business, adjustment plan of the company's management, adjustment plan of the company's organizational structure, revision of the company's articles of association, etc.). ). The company's major asset disposal plan helps to judge whether the whole constitutes a shell. If a listed company issues shares to a specific target to purchase assets, it should also pay attention to whether it touches the provisions of Article 19 of the Measures for the Administration of Major Asset Restructuring of Unlisted Public Companies: If a listed company issues shares to a specific target to purchase assets, and the total number of shareholders exceeds 200, it shall prepare application documents after the resolution of the shareholders' meeting and apply for approval in accordance with the relevant provisions of the China Securities Regulatory Commission.