Liu, Yifei (2022) Motivations and compliance of China-based companies listed overseas: evidence from the Australian Securities Exchange. Research Master thesis, Victoria University.

Abstract

The major motivations for the foreign stock market listing of China-based companies and their compliance with overseas disclosure requirements are examined in this thesis, with a focus on the Australian Securities Exchange (ASX). Research in this field is scarce. Chinese multinational companies are an emerging group in Australia and meeting an increasing demand from pre-Initial Public Offering (pre-IPO), existing China-based firms, regulators and investors is necessary. Fourteen confirmed Chinese companies that delisted from the ASX between 2018 and 2021 are analysed, along with 20 China-based companies that remain listed on the ASX. Most of the 14 firms were forced to delist, with only a few voluntarily delisting. In this thesis, the general and special motivations for listing, and reasons for the delisting of China-based companies on the ASX, as identified in the previous literature, are examined. The general motivations of companies listed overseas include raising capital, improving international reputation, and enhancing corporate governance. Motivations for listing include international business expansion, improving international recognition and achieving director’s self-interest. Based on descriptive analysis results, delisted China-based companies had lower opportunities for growth, lower liquidity, lower financial visibility but higher leverage compared with other ASX companies. Content analysis and case studies are used to analyse the motivations and compliance issues of China-based companies on the ASX. The content and case study analysis results indicate that the delisted China-based companies met various compliance issues during their listing. The two main issues include the difficulty of international money transfers from China to Australia, and failure to lodge annual or half-year financial reports. This is the first study, to the researcher’s knowledge, that systematically examines the China-based companies on the ASX. The results of such analyses are expected to assist pre-IPO Chinese companies considering listing on the ASX, existing Chinese firms on the ASX, Australian securities regulators and international investors.

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