Compared with ordinary enterprises, the biggest advantage of listed companies is that they can raise funds on a large scale in the securities market, thus promoting the rapid growth of the company's scale. Therefore, the listing qualification of listed companies has become a "scarce resource", and the so-called "shell" refers to the listing qualification of listed companies.
Because some listed companies have no complete conversion mechanism, poor management and unsatisfactory performance, they have lost the ability to further raise funds in the securities market. To make full use of this "shell" resource of listed companies, it is necessary to reorganize assets. Shell buying and backdoor listing are two forms of asset reorganization that make full use of listed resources.
Backdoor listing means that the parent company of a listed company (group company) realizes the listing of the parent company by injecting its main assets into its listed subsidiaries. One of the typical cases of backdoor listing is Johnson & Johnson Group's "mother" borrowing "child" shell.
Backdoor listing generally involves a large number of related transactions. In order to protect the interests of small and medium-sized investors, it is necessary to fully, accurately and timely disclose the information of these related transactions in accordance with relevant regulatory requirements.
Extended data:
First, the way to achieve
To achieve backdoor listing or shell listing, we must first choose a shell company, combined with our own operating conditions, assets, financing capacity, development planning and so on.
To choose a shell company with appropriate scale, the shell company should have certain quality, not too much debt and bad debts, and have certain profitability and restructuring plasticity. Next, non-listed companies gain a relative controlling position through mergers and acquisitions, and the ownership structure of shell companies should be considered. As long as they reach the controlling position, the merger will be successful. There are three specific forms:
A: A lot of time can be saved through cash acquisition. In this way, the intelligent software group went public by backdoor, and soon entered the role after the backdoor was completed, forming a good market response.
B: The liquidation, reorganization and merger of the "shell" can be completely realized through the replacement of assets or equity, which is easy to make the assets, quality and performance of the shell company change rapidly and realize the effect quickly.
C: the two methods are used in combination. In fact, most of them take this way to borrow "shells" or buy "shells" to go public.
Non-listed companies become controlling shareholders again, and through the reorganized board of directors, the listed shell companies are internally cleaned up and reorganized, and the non-performing assets are stripped or rectified to improve the original operating conditions and performance of the shell companies.
Second, accounting treatment
In view of some accounting firms with securities qualifications, there are some differences on how to deal with the accounting of non-listed companies through purchasing the equity of listed companies. The Accounting Department of the Ministry of Finance recently issued the "Reply on the Accounting Treatment of Indirect Listing by Non-listed Companies Purchasing the Equity of Listed Companies", which clarified the relevant issues.
In the reply, the Ministry of Finance made it clear that if a non-listed company obtains the control right of a listed company and does not form a reverse purchase, it should be implemented in accordance with the provisions of the Accounting Standards for Enterprises No.20-Business Combination.
Where a non-listed company obtains the control right of a listed company at the consideration of its investment in subsidiaries and other assets, which constitutes reverse purchase, the listed company shall handle the following situations differently when preparing consolidated financial statements.
At the time of the transaction, the listed company does not hold any assets or liabilities or only holds assets or liabilities that do not constitute business, such as cash and transactional financial assets. When preparing consolidated financial statements, listed companies shall follow the provisions of the Notice of the Ministry of Finance on Doing a Good Job in the Annual Report on the Implementation of Accounting Standards for Business Enterprises in 2008 (Cai [2008] No.60).
When the transaction occurs, if the assets and liabilities retained by the listed company constitute business, it shall be implemented in accordance with the Accounting Standards for Business Enterprises No.20-Business Combination and related explanations, that is, if business combinations are formed under different controls, the difference between the cost of business combination and the fair value share of the identifiable net assets of the listed company shall be recognized as goodwill or included in the current profits and losses.
If a non-listed company obtains the control right of a listed company, which constitutes a reverse purchase, the listed company shall determine the recorded value of the acquired assets in individual financial statements in accordance with the provisions of the Accounting Standards for Business Enterprises No.2-Long-term Equity Investment. Previous comparative individual financial statements of listed companies should be their own individual financial statements.
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