Study On The Influence Of Controlling Shareholder's Equity Pledge Behavior Of Zhangzidao Holding Group On Company Value

Equity pledge is also called pledge of equity,which refers to a financial activity in which the equity owners use the equity as pledge to borrows the required capital from a financial institution(such as a guarantee company,a commercial bank,etc.).In recent years,equity pledge behavior takes place in the domestic capital market on many occasions,in which,equity pledge behavior is particularly frequent.In reality,equity pledge has two advantages: First,the equity pledge can broaden the financing channels for listed companies;Second,due to the availability and high liquidity of equity,the risk of realized equity of financial institutions is low.The positive effect of equity pledge is that it can motivate the controlling shareholder to make the controlling shareholder play an active role in the development of the listed company through the efforts to improve the corporate governance thus increase the operating performance.However,the controlling shareholder's equity pledge behavior will give signal to the market that the financial situation of listed companies is worth serious consideration and the funds of the company are tightening.At the same time,the risk of ownership control caused by equity pledge financing increases and the risk of over-leveraging increases the probability of the controlling shareholder's interest transforming to the interests of listed companies,which can cause agency problems and negatively affect the value of listed companiesIn this thesis,taking Zhangzidao holding group as a research case,we confirm that a large number frequent equity pledge has a negative impact on the value of listed companies by analyzing the impact of the controlling shareholder's equity pledge behavior of Zhangzidao holding group on current stock price,the company's performance and the value of the company.In particular,this thesis uses event research to analyze the relationship between equity pledge and the value of Zhangzidao holding group.The study shows that,first,the large number of equity pledge of major shareholders will be more biased to obtain personal benefits,and easy to form the deterioration of operating performance and thus harm the value of the company.Second,equity pledge behavior within a short time will have a negative impact on the listed company's share price,however,there is uncertainty about the sustainability of this impact,and the overall market value is poor in the same listedcompanies.Based on the conclusion of the study,this thesis puts forward a proposal to curb the large and frequent equity pledge of the controlling shareholder aiming at the controlling shareholder's equity pledge behavior of Zhangzidao holding group.First,it will improve the governance structure of the listed company and strengthen the independence of the board of directors of the listed company to ensure a good development atmosphere.Second,it will strengthen the checks and balances of the controlling shareholder and attract institutional investors.Third,it will strengthen the making of laws and regulations related to equity pledge and effectively regulate the controlling shareholder equity pledge behavior to prevent the controlling shareholder from using up the of equity through equity.Fourthly,it will strengthen the penalties for violations and strengthen the implementation of information disclosure of related party transactions,with the expection that it will play a positive role in the healthy and steady development of China's capital market.