A Case Study on Financial Fraud of Wisdom Haipai Company in Aerospace Communication Subsidiary

Abstract

In recent years, performance commitment has increasingly become the "standard" of mergers and acquisitions of listed companies, which is used to alleviate the risk of information asymmetry and safeguard the interests of the acquirer. However, performance commitment has also aggravated the risk of financial fraud, and the acquired party often does not hesitate to sue for financial fraud in order to fulfill its performance commitment and avoid punitive damages for breach of contract. In order to provide suggestions for investors and regulators, this paper takes the aerospace communication Wisdom Haipai Company as an example, analyzes the means of financial fraud from the motivation of listed companies, and discusses how to prevent and supervise financial fraud.