| At the Central Financial Work Conference in 2019,General Secretary Xi Jinping repeatedly stressed the need to reduce the leverage of state-owned enterprises as the focus of work.We should effectively prevent and deal with financial risks,and prevent systemic risks.In this "de-leveraging" economic context,it is more difficult for SMEs to directly borrow from banks,and equity pledge has naturally become the best choice for many listed companies to raise funds.However,in recent years,more and more cases of financial fraud have been exposed after the equity pledge of the controlling shareholders of listed companies.In January 2019,Kangde Xin Composite Materials Group Co.,Ltd.,a listed company with a market value close to 100 billion,was exposed to financial frauds of tens of billions due to its inability to repay the bonds due,which caused the suspension of the IPO process of more than 40 companies.This case has caused widespread social concern.Based on the above background,the basic problem studied in this article is listed as follow: Take the recent occurrence of Kangde Xin Corporate as a result of equity pledge that has a significant impact on the market as an example.Analyze the financial risk of the company’s financial behavior after a series of financial actions taken by the controlling shareholder.Find out the reasons that lead to changes in financial risk.Summarize experiences based on the problems found,and make suggestions for improvement.Research ideas: Select Kangdexin Composite Materials Group Co.,Ltd.as the specific research object.Firstly,analyze the motivation and process of Kangdexin’s controlling shareholders ’equity pledge.Then analyze what financial actions have been taken after the equity pledge.Measure the overall financial risk faced by the company after the equity pledge by financial risk evaluation model and multi-variable financial risk evaluation model.Finally,this article will summarize the conclusions drawn from the case analysis and propose corresponding improvements..The research innovation and practical implications of this paper: Most of the existing literature research on equity pledge focuses on the motivation of shareholder equity pledge and its possible economic consequences for listed companies.Most of the research on financial risk focuses on the analysis of financial risk,causes and precautions,evaluation criteria,etc.However,few studies currently link the controlling shareholder’s equity pledge with the financial risk of the enterprise,and discuss how thecontrolling shareholder’s equity pledge will affect the operating decisions of listed companies,and then trigger changes in corporate financial risk.This paper can supplement the related research fields,while supplementing the related research that can be used to induce financial risks and the economic consequences of equity pledge in the past.Studying the financial risks of controlling shareholder’s equity pledges can not only urge shareholders to make decisions that are conducive to the company’s development,but also provide preventive suggestions for the financial risks brought by equity pledges.It can also sound a wake-up call for financial institutions and investors.It can help them realize the risks hidden behind equity pledges to maintain the stability of the securities market. |
