Chinese listed companies struggle to prevent related-party asset acquisitions that destroy shareholder value

ST Notai and similar Chinese public companies face scrutiny over acquiring loss-making assets from related parties at inflated prices, which destroys shareholder value and triggers regulatory investigations. Current corporate governance mechanisms and disclosure requirements fail to prevent these transactions, leaving minority shareholders vulnerable to dilution and fraud. Companies lack transparent valuation frameworks and independent oversight to stop connected-party deals that benefit insiders at the expense of public investors.