• “买壳” (literally, “buy shell”) is a metaphor for acquiring a listed company to act as a cover for the parent company, while “上市” means to get listed as a company.
• To become publicly listed, a larger private company can acquire or merge with a smaller listed company that is making losses.
• After a private company has acquired a smaller listed company, it injects capital and carries out restructuring so it can quickly attain the status of being listed.
• Since a reverse takeover is a relatively quick method to become listed and bypasses the stringent evaluation required in the usual procedure of getting listed, criminals can make use of this method and the status of being listed to conduct illegal activities.

Research in the United States revealed that some Chinese companies that do not qualify for
listing took certain actions in order to get listed in the United States. Besides the popular path of
reverse takeovers via intermediaries, these companies also rigged certain aspects such as the
company’s structure, causing investors to face huge risks. (Lianhe Zaobao, 30/9/2011)

借壳上市 (Mainland China)