Study On The Risk Of Equity Pledge In The NEEQ

With the rapid development of the NEEQ nationwide,more and more SMEs choose to list in the NEEQ.Through the NEEQ,companies can use equity pledge financing to raise funds for themselves.However,due to the fact that the NEEQ are not strict with the company’s listing conditions,and there is no restriction on the price fluctuations,stock liquidity is also quite different from that of listed companies.At the same time,Chinese regulations and policies on the use of equity pledge financing in the NEEQ are not sound,so there is a certain risk in the equity pledge business.For all parties concerned,it is of great significance to take the necessary measures to prevent the risk of equity pledge of the NEEQ.Taking LuJi Stock as a case,this paper analyzes the equity pledge business and concludes the causes of the equity pledge and the causes of the risks.At the same time,it puts forward targeted suggestions.Through analysis,it can be found that LuJi Stock are mainly used for the purpose of obtaining funds quickly.At the same time,the controlling shareholders’ shares will not be diluted,their control over the company will not change,and they can also use the restricted shares to raise funds and facilitate the controlling shareholder to hollow company.The risks arising from the pledge of equity include liquidity risk,market risk,equity disposal risk,and credit risk.The behavior of controlling shareholders cannot be well constrained,the lack of information disclosure and the conscious risk of pledgee are weak,and the risk control ability is not strong.The lack of external supervision will become the cause of equity pledge risk.Based on the above analysis,this paper proposes corresponding suggestions from three perspectives: company,pledgee and regulatory agency to reduce the risk of equity pledge and standardize the equity pledge financing behavior.Among them,it is suggested that the company should focus on improving its own strength after the equity pledge loan,improve the follow-up disclosure of the equity pledge funds,and establish an effective supervision mechanism for the controlling shareholder.For the pledgee,it is necessary to strengthen the evaluation and review of the pledge enterprise.The pledgee first needs to accurately evaluate the stock price of the financing company before lending.Byanalyzing the business status and financial information of the enterprise,the purpose of financing is determined.The terms of the agreement are strictly stipulated during the pledge,and the third party is required to be notarized.After the pledge,the pledgee should continue to pay attention to the company’s operating status..Through the above measures,the degree of risk of equity pledge financing can be determined,and then risk preparedness is prepared before financing to avoid taking greater risks.For the regulatory authorities,it is necessary to strengthen the supervision of equity pledge financing companies and force them to disclose important equity pledge information.At the same time,it should limit the proportion and duration of equity pledge financing for SMEs,and formulate sound regulatory regulations to regulate corporate behavior.