Identification and Regulation of Related Party Transaction Fraud under Performance Commitment Pressure: A Case Study of Aerospace Communications

DOI

10.2991/978-94-6239-642-5_11How to use a DOI?

Keywords

Fraud in Connected Transactions; Aerospace Communications; GONE Theory; Performance Commitment

Abstract

With the implementation of the registration system, the activity in mergers, acquisitions, and reorganizations in the capital market has increased, and the “Performance Commitment” centered put-option agreements have become widespread. However, the fraudulent behavior of some companies using related-party transactions to embellish their financial statements has occurred frequently, seriously damaging the interests of investors. The article, therefore, examines the connected transactions of Hipad Intelligent Technology Co., Ltd., a subsidiary of Aerospace Communications, as the research object. Using GONE Theory, principal-agent theory, and case analysis method, a framework for “Fraud Identification - Motivation Analysis - Governance Plan” was constructed to explore the motives and countermeasures of fraud in connected transactions. Research findings indicate that Aerospace Communications’ fraud is attributable to multiple factors: performance commitment pressure serves as the original driving force, the interest impulses of controlling shareholders and management exacerbate greed motives, corporate governance deficiencies and information asymmetry provide operational opportunities, and low illegal costs reduce the risk of fraud exposure; Hipad Intelligent Technology Co., Ltd. inflated revenue and profits by fabricating four types of related party transactions, namely fictitious sales, fictitious procurement, fictitious R&D outsourcing, and fund borrowing and lending, ultimately leading to the company’s delisting; Such fraud leads to financial deterioration and credit bankruptcy of the company, while also damaging the interests of investors and undermining regulatory credibility.

Copyright

© 2026 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Enge Qiu
PY  - 2026
DA  - 2026/04/29
TI  - Identification and Regulation of Related Party Transaction Fraud under Performance Commitment Pressure: A Case Study of Aerospace Communications
BT  - Proceedings of the 2026 11th International Conference on Financial Innovation and Economic Development (ICFIED 2026)
PB  - Atlantis Press
SP  - 94
EP  - 104
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6239-642-5_11
DO  - 10.2991/978-94-6239-642-5_11
ID  - Qiu2026
ER  -