Research On The Risks And Preventive Countermeasures Of Controlling Shareholders' Equity Pledge

As a new financing method,equity pledge is favored by more and more capital demanders because of its convenience and high liquidity.Among them,there are many controlling shareholders of listed companies.In recent years,China's listed companies have frequently experienced large-scale pledge of equity by controlling shareholders.At present,the risk of equity pledge of A-share listed companies has made the financial regulatory authorities quite anxious,behind the reality of the current “no stocks” in the A-share market..Although the equity pledge solves the capital needs of the company and individuals,the phenomenon of large shareholders' short selling and control transfer caused by equity pledge also occurs frequently.The risk brought by equity pledge seriously jeopardizes the healthy operation of the capital market.The analysis of the controlling shareholder's equity pledge financing case,studying the risks arising from the equity pledge,and proposing countermeasures to solve the equity pledge risk,has important academic and practical significance for the future operation of the equity pledge standard operation in the capital market.This paper first expounds the research background and research significance,and sorts out and reviews the related researches of domestic and foreign scholars from three aspects: motives,risk types and risk response of major shareholders' equity pledge;secondly,Shenzhen Tongzhou Electronics Co.,Ltd.For the research case,the process and motivation of the equity pledge of Tongzhou Electronics' major shareholder were introduced.Thirdly,the risk of the equity pledge of Tongzhou Electronics was measured and analyzed by using the financial indicator analysis method,the Z-score model and the Tobin Q value.According to the reasons for the risk,propose a targeted prevention strategy.The study found that the shareholder pledge of the major shareholder increases the degree of separation between the control rights and the cash flow rights,triggering the motive of the interests of the major shareholders.The large shareholders use the external guarantees,sell high-quality assets,manipulate information disclosure,etc.The pressure of repayment makes the controlling shareholder adopt a radical investment strategy.After the pledge of the shareholding of the major shareholder,the financial situation of the company deteriorates and the company's value decreases.The company faces moral hazard,disposal risk and investment risk.Through the measurement and analysis of risk,Specific prevention strategies are proposed,including improving internal corporate governance,strengthening external supervision,and improving stakeholder risk prevention and control capabilities.Through this series of risk analysis and response,this paper hopes to give warning to other listed companies in the capital market,and finally promote the healthy development of capital markets and listed companies with the correct use of equity pledge.