Bankruptcy Reorganization of Listed Companies with Chinese Characteristics

Abstract

The bankruptcy reorganization of listed companies in China matters a lot to the local governments and local economy. Although the Enterprise Bankruptcy Law (the “EBL”) of the People’s Republic of China (“PRC”) does not grant many rights to the government in the enterprise bankruptcy, the government intervenes actively into the bankruptcy reorganization of listed companies in practice. There appears a great gap between the reorganization system in the book and its implementation in practice. This paper examines the reorganization of 45 listed companies in China through a detailed case study, analyses the reorganization system of listed companies with Chinese characteristics and critiques that government intervention in the reorganization of listed companies violates the goals of the reorganization system and does not lead to efficient results. The author argues that the government should reduce its intervention in the reorganization of listed companies to let the reorganization system smoothly work.