Analysis Of The Economic Consequences Of The Controlling Shareholder Equity Pledge Financing

After experiencing a global financial crisis,the global financial crisis slowed down,corporate financing became more and more difficult.Under such a macro environment,the equity pledge financing model began to rise.The rapid development of the capital market has made the equity pledge financing model gradually favored by many listed companies.At the same time,the market value and proportion of the controlling shareholder's equity pledge are rising sharply.The controlling shareholder of a listed company raises funds from banks and other financial institutions in the form of equity pledge,and turns the original unmoved equity into a moving asset,which broadens the financing channels of enterprises and alleviates the difficulty of financing.However,in this mode,the control of the controlling shareholder and the cash flow rights will be separated,and at the same time,the rights of other small and medium shareholders of the company may be infringed.Therefore,it is the focus and difficulty of this research to study how controlling shareholders use unreasonable equity pledge to infringe on the company's interests and other shareholders' rights and to launch corresponding measures to prevent it.The article analyzes the actual case and takes Yinyi Co.,Ltd.as the introduction object,and analyzes the motivation of the company's controlling shareholder's equity pledge.It believes that the controlling shareholder has three reasons for the equity pledge financing: one is the company's financing demand,and the other is Strengthen the management of control rights,and third,high-risk investment.And from the perspective of the degree of separation of the company's control and cash flow rights,short-term market reaction and changes in company value,and financial status,the economic consequences of equity pledge are considered.Through analysis and calculation,the controlling shareholder of the case company is not Reasonable high proportion of equity pledge behavior has a negative impact on the degree of separation of cash flow rights and control rights,the company's value and financial status.The negative impact on the controlling shareholder's equity pledge is proposed from different angles.Comments and suggestions.It is hoped that through this research,the controlling shareholder's equity pledge behavior will receive more attention and constraints,reduce agency problems,and promote shareholder behavior in a direction beneficial to the company.It is necessary to give full play to the positive role of equity pledge and avoid its negativeeffects,but To achieve this goal,we still need to pass a lot of follow-up practices and we need to work tirelessly.