The Impact Of Controlling Shareholder’s Pledge On Campany Value

In recent years,because of its low threshold,simple procedure,few restrictions,easy circulation and easy valuation of the pledge target equity,equity pledge has become the preferred financing method for the majority of shareholders of listed companies,especially the controlling shareholders.During the period of stock pledge,the ownership of the stock still belongs to the controlling shareholder.As the pledgor,the controlling shareholder can not only obtain the capital,but also maintain the control of the listed company after the equity pledge.Therefore,the scale of the equity pledge of the controlling shareholder in the A-share market is growing rapidly.Under this kind of market background,what kind of influence will the individual behavior of the controlling shareholder,equity pledge,have on the value of the company,has become a problem worthy of further study.In this paper,intercontinental oil and Gas Co.,Ltd.,which was forced to close its A-share market in 2017 and attracted wide attention,is selected as the case study object,hoping to provide some suggestions for investors and regulators by exploring the impact of its controlling shareholders’ equity pledge behavior on the company’s value.The main contents are as follows: firstly,the paper introduces the general situation of the company and the status of equity pledge,analyzes the characteristics of multiple cycles and high proportion of the equity pledge of its controlling shareholders,and analyzes the causes of the pledge combining with the case background.Secondly,it explores the ways that the controlling shareholder’s equity pledge affects the company’s value,finds that the case company’s equity pledge aggravates the degree of separation of the two rights,causes the second kind of agency problem,and presents a series of unconventional corporate governance behaviors,such as the use of related party transactions and guarantees for interests encroachment,radical investment,reducing the quality of information disclosure,etc The way of signal transmission affects the value of the company.Then,from the perspective of financial situation,market value,Tobin Q value,it is found that the equity pledge behavior of the controlling shareholders of intercontinental oil and gas has a negative impact on the value of the company.Finally,the paper puts forward corresponding enlightenment and suggestions from the perspectives of internal control,external supervision and stakeholders.