Listed Companies' Suspension Rights Are Abused And Suspension Is Mostly To Avoid Falling Share Prices.

Statistics show that since July, there are as many as 35 listed companies temporarily suspended. As for the reasons for suspension, most of them are planning major issues.

In the 276 companies currently suspended, the number of consecutive suspension days reached more than 100 days, reaching 39. Due to long-term sustainability, investors' trading rights were seriously damaged.

A brokerage analyst in Shenzhen said to the times that the temporary suspension of listed companies was mostly due to the excessive drop in share prices. If they continue to fall, large shareholders may be faced with a burst of stock, but the right to suspend trading of listed companies will be abused. They will also become exponentially distorted and market liquidity dried up, which is unfair to investors.

In fact, during the stock market crash in 2015, the listed companies would stop trading as a sharp weapon to avoid the fall of share prices, or even a miracle of 1000 stock suspension. The ratio of suspension companies was more than 52%, resulting in the imbalance of market liquidity and the serious distortion of various stock indexes.

The suspension right of listed companies is abused, and the suspension is mostly to avoid the fall in share prices.

Statistics show that as of today,

Of the 3297 stocks, a total of 276 stocks are in suspension, with a suspension rate of over 8%, of which 39 have been suspended for more than 100 days in a row, and 9 have been suspended for more than 200 days. The longest time for suspension is *ST new billion, and the number of consecutive suspension days has reached 396 days.

A noteworthy phenomenon is that more and more listed companies stop trading because of the large shareholders' equity pledge, which touches the warning line or even the closing line.

There have been many reasons for the suspension of listed companies, but the two most important reasons are major issues and non-public issuance.

If a listed company is indeed necessary to postpone the resumption of a licence, it may apply for an extension until the expiration of the licensing period after the approval of the board of directors. The cumulative suspension period shall not exceed 3 months in principle.

If the suspension is continued, it can be postponed to a cumulative period of 6 months after the approval of the shareholders' meeting.

In this way, the listed companies have quite convenient operation space.

The average suspension time of listed companies is long, arbitrariness is large, and information disclosure is general. The suspension rate and average stopping time of A share listed companies far exceed the mature market such as Hong Kong stock and stock market.

A typical example is Vanke's suspension in A shares for up to 6 months, while in Hong Kong stocks it is less than 20 days.

In the US stock market, there is only a short time to suspend trading: first, for information disclosure needs, the two is to ease sharp fluctuations in stock prices.

To completely stifle the "stop and stop" of the listed companies, they have to exert their strength in daily supervision.

On the one hand, the exchange should strengthen the review of the application for the suspension of listed companies, regularly check the progress of the project in the process of suspension and match the initial report, for those who have obvious fraud and a great deal of suspension before and after the discovery, they will be coercion once they are discovered.

At the same time, the punishment should be given accordingly.

On the other hand, those who abuse the right to suspend business,

If a listed company is not truthful, inaccurate, incomplete and violates the relevant public commitments, the exchange may take regulatory measures or disciplinary action. If the circumstances are serious, the exchange shall promptly bring the CSRC and its dispatched offices to verify and make serious treatment, and at the same time, establish an investor compensation mechanism to compensate for the loss of investors caused by the long suspension time.

Only under strict supervision and substantial increase in the cost of violating regulations can the listed companies enhance their consciousness, and the problem of arbitrary suspension and willful suspension will have the chance to get substantive solutions.

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