Research On The Risk Of Equity Pledge Of H.Brothers’ Controlling Shareholders

The essence of equity pledge behavior is financing behavior.Because equity pledge generally does not cause the owner of the equity to lose the ownership of the equity,for the actual controller of the company,it is conducive to its ability to control the company while obtaining financing.In other words,the equity itself has a certain degree of liquidity,so it is also generally welcomed by pledgees.Especially for listed companies,equity has higher liquidity,so equity pledges are common in China’s capital market.Especially for some listed companies that lack financing channels,their controlling shareholders can not only pledge their restricted stocks by using equity pledge financing transactions,but also maintain control over listed companies.Due to the bottleneck of the development speed of China’s real economy at the current stage,it is even worse for listed companies lacking financial support.Under the background of difficult financing,the controlling shareholders of listed companies are more enthusiastic about equity pledge financing.Equity pledge financing transactions are becoming more frequent.Although equity pledge financing can alleviate the shortage of funds of listed companies,there are still certain risks and problems behind this increasingly frequent behavior of equity pledge financing.Based on an analysis of the above phenomena,this paper takes HBrothers which is China’s A-share listed company as an example.The main purpose is to analyze the practical problems existing in the controlling shareholder’s equity pledge.Starting from the motivation of the controlling shareholder’s equity pledge financing,this paper applies the theory of superior financing to explore the controlling shareholders’ numerous financing Why did you choose the method of equity pledge financing? Use the event research method to analyze whether the pledged equity will have a certain impact on the company’s stock price in the face of the closing risk caused by the decline in stock price.Use agency theory to analyze if there is a serious negative Impact,whether the controlling shareholder will take advantage of its controlling shareholder to take advantage of the interests of small and medium shareholders to avoid risk,which will eventually lead to an increase in agency costs and a reduction in the value of the company.Judging from the analysis process and conclusion of this article,the purpose of the controlling shareholder’s equity pledge behavior is to meet the capital needs of the development of listed companies.Due to the limited financing methods,equity pledge financing can have the effect of sending carbon in the snow,but because The value of equity may decline due to various reasons,which causes the controlling shareholder to face the pressure of adding additional collateral and liquidation.In order to avoid the risk of control transfer,the controlling shareholder will use its unique control position to control the small and medium shareholders of the listed company.The act of encroaching on interests has led to aggravation of the agency problem,which has ultimately reduced the value of listed companies.