On Equity Pledge Financing Risk Of NEEQ

National Equities Exchange and Quotations,the NEEQ,was approved in 2006 and began accepting applications for listing of small and medium-sized enterprises nationwide on December 31,2013.After several years of development,NEEQ has become an indispensable part of the capital market.At the same time,more and more enterprises are financing in NEEQ market,especially in the form of equity pledge.However,due to the low listing threshold of NEEQ enterprises,the poor liquidity of corporate equity and the imperfect regulations and policies related to equity pledge,the issue of the risk of equity pledge financing of NEEQ has become increasingly prominent.Therefore,how to prevent the risks arising from equity pledge financing in NEEQ market has important practical significance for the SMEs listed in NEEQ and even the NEEQ market.Taking Huasheng Holdings company as a case,this paper analyzes the process,motivation,risks and risks of its equity pledge,and proposes measures to prevent equity pledge risks based on case objects,pledges and government departments.The motives of Huasheng Holdings equity pledge mainly include the ability to obtain liquidity quickly,the use of restricted shares of major shareholders for financing,the controlling shareholder will not dilute the equity and the controlling shareholder can short-sell the company.There is a big risk hidden behind the equity pledge of Huasheng Holdings,and Huasheng Holdings has not played a good role in preventing risks in the existing measures of equity pledge financing,such as emergency suspension.Judging from the reasons for the risks arising from the equity pledge financing of Huasheng Holdings,the board of directors of Huasheng Holdings is in vain,the internal control of the enterprise is not in conformity with the norms,and the use of funds for corporate equity pledge is not properly disclosed and used improperly.The pledgee has equity The risk awareness of pledge is not strong and the external shortage of corporate supervision is the main reason.Therefore,how to prevent the risks exposed in the case is what we need to solve.This paper mainly discusses the measures for the prevention of equity pledge financing risk of NEEQ enterprises from the perspectives of listed companies,pledgeeers and regulatory agencies.This paper suggests that the listed company stipulates the proportion of a controlling shareholder in the company's articles of association when it conducts equity pledge.The enterprise can also introduce more small and medium shareholders,dilute the control of the controlling shareholder,and recommend that the listed company establish the proper independent director and resident.Foreign directors,etc.,to better represent the interests of small and medium-sized shareholders;for the pledgee,first of all,we should increase the awareness of risk identification and risk prevention,and understand the operation of the listed companies and whether the internal control is good before the equity pledge is finalized.The company's risk prevention measures,etc.,can allow third parties to supervise in the pledge process,and at the same time,after the completion of the equity pledge process,the necessary understanding of the operation of the listed company and the use of funds obtained by the equity pledge.For the government and other regulatory authorities,it is necessary to improve the relevant regulations on the equity pledge of NEEQ,and make clear provisions on the company's equity pledge ratio and the time of cancellation.For companies that violate relevant regulations,a penalty mechanism should be established,and for NEEQ small and medium-sized The disclosure of information related to corporate equity pledge should strengthen supervision and management,and restrict the unreasonable equity pledge behavior at the source,so that NEEQ SMEs can carry out equity pledge financing in a healthy and benign manner.