Research On Risk Of Equity Pledge In Orient Landscape

In recent years,China's capital market has developed rapidly,and the company's financing channels have gradually diversified.The listed company's equity is characterized by its liquidity and easy to liquidate,so it is widely used for pledges to obtain loans from third-party institutions.Private listed companies are one of the main participants in the capital market.Because the shareholding structure is more concentrated than that of state-owned listed companies,the balance of power of major shareholders is weaker,and the separation of control rights and ownership is greater,leading to the equity pledge financing rate is high of some private listed companies,and the potential risks of equity pledge are gradually emerging.In the period of prosperity and development of the architectural garden industry,garden industry companies always face serious problems of tight capital chain.With the company's scale and environmental protection business continues to expand,the disadvantage of Orient Landscape's shortage of funds has gradually emerged,and the equity pledge has become one of the ways of financing of the company's major shareholders.Previous studies have focused on the issue of corporate agency arising from the separation of control rights and cash flow rights,and thus extended the analysis of the behavior of controlling shareholders'encroachment on the company's interests,but little research has been done on the controlling shareholder's equity pledge behavior.In recent years,domestic scholars have gradually begun to study the equity pledge financing methods,but so far most of them only involve the legal level.Some scholars have done empirical research of equity pledge and earnings management,company performance,information disclosure quality,enterprise innovation and auditor pricing.But there has rarely mentioned the risks and precautions of equity pledge,and lacks specific case analysis related to equity pledge.In view of the above shortcomings,this paper selects Orient Landscape,which is representative of the garden industry in private listed companies.This paper use case support,and combine company announcements and financial data to conduct specific case analysis.In-depth analysis of Orient Landscape's equity pledge financing method,identify the risk points of equity pledge financing,and put forward preventive suggestions.We find that the equity pledge sends negative signals to the market,such as insufficient funds,poor financing and poor operating conditions.These negative messages aggravate the fluctuation of the company's stock price.If the stock price falls.it will further affect the equity pledge,requiring shareholders to supplement the pledge or redeem the pledged shares in advance.If the pledged shares cannot be replenished or redeemed in advance,the risk of control right transfer will be brought to the controlling shareholders,and the risk of control right transfer will aggravate the fluctuation of stock price,causing a vicious circle.In addition,the risk of equity pledge transmits the risk to the listed companies by influencing the short-term market,deepening the separation of the two rights of the controlling shareholders,and influencing the position of the controlling shareholders,which increases the financial risks of the companies and has certain influence on the solvency and profitability of the enterprises.This paper hopes to add new cases to the academic research on equity pledge,and expand the research ideas and perspectives.It hopes to provide reference for other private listed companies to raise funds and management,provide useful ideas for enterprises using capital market resources and expanding financing channels.