Case Study On The Benefits Expropriation Of The Major Shareholders Of Honglei

Equity pledge refers to the act of the shareholder pledges the shares of the listed company to a financial institution such as a bank,a trust company or an insurance company or a natural person to obtain a loan or provide a guarantee for a third-party loan.The advantages of equity pledge are mainly reflected in the simple operation,low cost,fast loan,flexible time limit,unaffected control and unlimited use of funds,so it is favored by major shareholders.In the current difficult situation of corporate financing,equity pledge is an important way for listed companies to raise funds.According to statistics,there were only a few hundred companies that implemented equity pledge in China's A-share market in 2013.By 2018,there were more than 3,000 companies in China's A-share market to implement equity pledge,regardless of the number of companies pledge of equity or the amount of deposit.Increasingly,and the frequency of pledges continues to rise.This paper takes the interest share encroachment of the large shareholder of Honglei Shares using equity pledge as the research object.The major shareholder of Honglei shares integrates funds through equity pledge,but in the process of equity pledge,the issue of principal agent and minority shareholders is more prominent.Major shareholders use this opportunity to successfully achieve benefits encroachment.Especially in small and medium-sized enterprises,the use of equity pledge by major shareholders for the purpose of encroachment of interests often occurs.A more prominent feature of SMEs is the high concentration of equity,which makes the principal-agent effect between major shareholders and minority shareholders more significant.It is of theoretical and practical significance for the major shareholders to invade the interests of small and medium-sized shareholders through related guarantees,related transactions,and capital occupation after the equity pledge.This paper is divided into five parts,the introduction part expounds the background and significance of this study,relevant research results at home and abroad,research framework and research methods,as well as possible innovation points in this paper.The first chapter introduces the concepts and theories related to equity pledge and interest encroachment,which lays a theoretical foundation for the analysis of the latter text.The second chapter is to introduce the case of the interest encroachment by the shareholdersof Hong Lei's shares in the use of equity pledge,and in this chapter,the development course and present situation of the equity pledge of listed companies in China,the development situation of Hongsheng Co.,Ltd.and the pledge of the equity of the shares of Hongsheng Lei are introduced.The third chapter analyzes the cases,analyzes in this chapter the way that the large shareholders use the pledge of equity to encroach on the interests,analyzes the mechanism of the equity pledge to aggravate the interests of the major shareholders,and expounds the reasons why the benefits encroachment of the major shareholders can proceed smoothly and the influence of the encroachment of the interests of the major shareholders on all parties.The fourth chapter is through the analysis of the previous article,from the company level and the regulatory level to put forward specific countermeasures and suggestions.