Study On The Motivation And Consequence Of Major Sharehol Ders’ Tunneling Behavior Under Equity Pledge

With the rapid development of China’s economy,the financing needs of enterprises are gradually prominent,but many enterprises are difficult to meet the financing needs.In this case,the equity pledge is due to the complexity of its liquidity is strong,do not need to continue the approval process,fast cash and liquidation threshold is low and the value of equity in the liquidation of not transfer does not change the ownership of equity at the same time,in a short period of time has become the most preferred way of financing.The emergence of equity pledge effectively alleviates the financing constraints faced by the vast majority of enterprises in China,especially private enterprises.As long as the major shareholder can repay the debt in accordance with the prescribed time,the equity can be redeemed.The difference between equity pledge and other financing methods is that the financial risks and financing risks brought by equity pledge are obviously low.In the short term,this financing method can be regarded as perfect.However,with the popularity of equity pledge in the capital market,a series of risks are also gradually exposed.This paper takes *ST Zage as a case study to study the tunneling behavior of major shareholders under the equity pledge and its consequences.First of all,this paper introduces the research background and significance,collates the relevant literature on equity pledge and hollowing based on the research purpose,and sorts out and summarizes the research results of domestic and foreign scholars to clarify the research ideas.Then,this paper introduces the case study,first introduced the *ST Zage’s basic background and development course and the characteristics of large shareholders equity pledge,and in the subsequent study,*ST Zage’s equity pledge improved the control of the big shareholders and the degree of deviation of cash flow rights,reduced the cost of the empty,in turn,contributed to the series of hollowed big shareholders subsequent behavior.This paper combed out the behavior of the major shareholders and analyzed the means of the major shareholders.Finally,this paper studies the consequences caused by the tunneling of major shareholders.The research shows that the tunneling of major shareholders has a negative impact on the short-term market,the financial risk and the investment efficiency of the enterprise,which represents that the large-scale equity pledge of the listed company may be the signal that the major shareholders are about to tunneling the listed company.This paper puts forward targeted suggestions for other listed companies to provide experience in preventing such risks.