Dandong Xindai's Over IPO Fraud Research Assignment

Dandong Xindai's Over Ipo Fraud
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The China's securities market was established in 1997; however, since then there have been various cases of financial fraud where companies in the stock exchange companies have tried to cheat investors and controllers. For example in 2001, Cuangxia Industry Corporation., came up with an inflated amount o 178 million Yuan complete profits, all these were a case of financial fraud when in 1999 there was a record increase of 567 million Yuan in profits. In the year 2006 also, Guangdong Kelon Electric Holdings Corporation reported an addition amount of 1200 million Yuan in operating income. There was also an increase of 120 million Yuan pure profits through falsifying surpluses in accounts CITATION Ter05 \l 1033 (Warfield, et al., 2005). In 2013, the Wanfu Biotech Agricultural Development cooperation reported an upsurge in profits from2008 to the year 2012 through forgery of accounting excesses. In this regard, financial fraud will not only cause the distortion of financial information with regard to the listed companies, but it will also lead to investors making a poor judgment and poor decisions on the basis of information the read from the securities exchange. In the end, investors will have to suffer losses in investment CITATION Gon06 \l 1033 (Chen, et al., 2006). This will also provide an opportunity for bad money to circulate while good money is driven out.
Other implications for this is the reverse market allocation. In addition, this causes serious legal and economic consequences for the responsible agencies. It thus becomes very necessary and important to conduct a deeper analysis on main inducements among other methods to monitor and curb financial cheating with regard to listed companies in China’s securities exchange CITATION HAN15 \l 1033 (Ndofor, et al., 2015). This report discusses implications of cheating by looking at the story of Dandong Xindai’s Electronic which was delisted in 2016 after it was found to practice Initial Public offer fraud.
Consideration
Dandong Xintai is a Chinese based Electric company which specializes in the manufacturing and selling of power equipment in China. The company products include magnetic control, magnetic valve controllable, dry type air core series, automatic compensation stage series, oil-immersed series, dry type shunt, suppression coils and neutral grounding reactors. This shows that the company is mainly engaged in the manufacturing of power transmission equipment and power compensation devices like grid performance optimization equipment, sales, production, electricity systems, power supply and distribution. In this manner, the company has been in the forefront when it comes to the provision of technology solutions and power equipment CITATION GCh06 \l 1033 (Chen, et al., 2006). With the growing competition, the company has been facing harsh market economies which have seen it perform low under the harsh economic conditions of the international and domestic markets for a systematic industry analysis of the industry market and demand for judgments.
The company was also able to develop itself into stable economic domestic market...