Case Analysis Of The Pledge Behavior Of The Controlling Shareholder Of Lifan

In recent years,under the influence of economic downturn and financial deleveraging,listed companies and small and medium-sized enterprises are facing more and more financial constraints in traditional financing channels.Because of its unique advantages of maintaining the controlling position of shareholders,less restrictive conditions,high efficiency and flexibility,equity pledge has gradually become an important financing means for shareholders of listed companies.Since2013,Shanghai and Shenzhen stock exchanges began to officially carry out the equity pledge type repurchase business,the scale of equity pledge business has increased sharply.At the end of 2017,the total number of shares pledged in the A-share market reached 450.8 billion,with a total proportion of nearly 10.98%.However,since the beginning of 2018,under the dual pressure of the Sino US trade war and the downturn of the capital market,there have been incidents in the A-share market in which the risk of equity pledge broke out due to the continuous decline of the stock price of listed companies.By the end of 2018,the number of shares suspected to be closed by equity pledge has nearly reached 45% of the total pledge.The news that listed companies have been forced to close positions and the huge amount of suspected closing positions make the A-share market under the background of "one thousand shares pledge" full of equity pledge crisis,and even cause systematic risks in the stock market when it is serious.In order to effectively alleviate the outbreak of the risk of equity pledge,the national financial regulatory authorities have taken market rescue measures from both laws and regulations and capital operation,which also reflects the research significance of this issue from the side.As the main body with the largest share proportion of listed companies,thebehavior of controlling shareholders' equity pledge is bound to have an impact on listed companies and small and medium-sized shareholders.However,equity pledge is only a neutral means of financing,and there is no fault in itself.What kind of impact it has depends on the development background of the company,behavioral motivation,the purpose of pledge funds,the appropriateness of pledge proportion,and the reasonable coordination of key factors such as subsequent risk control of pledge.However,there are financial risks and operational risks in the troubled listed companies.If the behavior of controlling shareholders' equity is unreasonable,this fuse may increase the company's hidden dangers.Therefore,this paper selects the equity pledge behavior of the controlling shareholders of Lifan as the case study.Based on the data of Lifan's strategic layout,equity structure and previous equity pledge of the controlling shareholders,the internal motivation of equity financing of the controlling shareholders is deeply explored.Then it analyzes the use of the pledged funds,the risk response to the stock price decline and the nonstandard information disclosure of the controlling shareholders after the pledge activities.Finally,by using the event study method,Z-value early warning model and data comparative analysis,this paper focuses on the four issues of Lifan stock in the development dilemma: whether the financing activities of equity pledge have a negative impact on the short-term stock price of listed companies,whether the risk of control transfer is increased,whether the company's financial situation is improved,and whether the interests of small and medium-sized shareholders are encroached.Through the in-depth analysis of the case of Lifan's equity pledge,it is concluded that under the background of the company's development,which is characterized by weak main business,irrational multiple investment,loss of product sales and enhanced financing constraints,the excessive equity pledge of the controlling shareholders accelerates the break of the capital chain,which has a negative impact on the company's stock price,financial situation and small and medium shareholders,and on the company's development Form a vicious circle.To sum up,this paper respectively from the three perspectives of internal management of listed companies,moderate financing of controlling shareholders,small and medium shareholders and risk prevention of pledgee to get relevant enlightenment,and put forward corresponding suggestions on the legal supervision of equity pledge in China and the macro market stability of equity pledge in China.Promote the listed companies to establish a perfect internal management system,prevent the controlling shareholders from over financing,strengthen the risk awareness of small and medium-sized shareholders and pledgees,promote the improvement of relevant laws and regulations of equity pledge in China,and relieve the overall risk of equity pledge market in China.