Research On The Risk And Prevention Of Equity Pledge Of Meijin Energy’s Controlling Shareholders

As a financing method,equity pledge has advantages such as convenient procedures and low threshold standards compared to other financing methods,and is currently one of the important channels for listed companies to conduct corporate financing.However,in recent years,the number of equity pledges by listed companies in China has increased,and the proportion of equity pledges by controlling shareholders has continued to increase.Equity pledges not only greatly shorten the time and effort required for corporate financing,but also have a certain adverse impact on enterprises.In the coal mining and beneficiation industry,Shanxi Meijin Energy Co.,Ltd.(hereinafter referred to as Meijin Energy)ranks among the top in the industry in terms of its controlling shareholder equity pledge ratio.As of the end of2021,it has accumulated 99.97% of its own shares pledged,and the equity pledge behavior and impact of the controlling shareholder are very obvious.Therefore,this article selects Shanxi Meijin Energy Co.,Ltd.as the research object of equity pledge behavior.Firstly,the case analysis method was used to sort out the equity pledge process of Meijin Energy’s controlling shareholders from 2016 to 2021,and compared with other listed companies in the coal mining and beneficiation industry to analyze the motivations and characteristics of Meijin Energy’s controlling shareholder equity pledge.Through research,it has been found that the equity pledge behavior of Meijin Energy’s controlling shareholders has the characteristics of high proportion,fast frequency,and concise pledge announcements.The main motivation for the pledge is to supplement working capital,meet development needs,and make supplementary pledges.Secondly,from three aspects of market operation,financial indicators,and enterprise value,the cumulative rate of return method was used to measure market returns.Tobin Q value and EVA were used to measure enterprise value,and the current situation of Meijin Energy Company was analyzed in conjunction with other financial indicators of the company.Through the research,it is found that the equity pledge behavior of controlling shareholders will reduce the market income of enterprises and have a negative impact on the market value,profitability,long-term solvency,business ability and growth ability of enterprises.On the contrary,it will improve the short-term solvency of enterprises.Finally,using literature research and case analysis methods,the equity pledge risks of Meijin Energy’s controlling shareholders were analyzed by reading the equity pledge announcement and annual financial report of Meijin Energy Company.It was found that the main reasons for the equity pledge risks of Meijin Energy’s controlling shareholders were incomplete internal mechanisms,lack of information disclosure content,single financing channels,and lack of supervision of equity pledge behavior,At the same time,targeted preventive measures have been proposed from four aspects: governance mechanism,information disclosure,financing channels,and pledge control.This article aims to analyze the risks and causes of the equity pledge behavior of Meijin Energy’s controlling shareholders,propose corresponding preventive measures,and provide valuable reference for other listed companies.