Research On The Economic Consequences Of The Equity Pledge Of The Controlling Shareholders Of Listed Companies

Business operations require a lot of liquidity,and banks,as the main source of financing for an enterprise,often have to examine the size and credit status of the enterprise to assess whether and how much money is being lent to the enterprise.Equity pledge is favored by enterprises as a new financing method.In 1995,my country first confirmed that stocks can be pledged.So far,the equity pledge system has undergone several changes.The controlling shareholder holds a large number of company stocks,and at the same time is unwilling to sell the stock to lose control of the company,so the company is more willing to pledge the equity it holds to obtain financing.Equity pledge can monetize the restricted shares by way of pledge,which improves the liquidity of equity to some extent.Since 2013,the proportion of equity pledges has risen rapidly.It can be seen from the data statistics platform that more than 80% of the companies have participated in equity pledges.Among them,the number of companies pledged by controlling shareholders accounts for nearly half,and there are a large number of controlling shareholders.Equity close to 100% equity pledge.The ensuing risks are also increasing.Based on this,this article selects Storm Group as a case to analyze the motivation and economic consequences of the entire shareholder's equity pledge process,hoping to give small and medium shareholders and regulatory authorities a certain degree of warning.This article first defines the relevant concepts of controlling shareholders,controlling shareholders' equity pledges and economic consequences,mainly based on the principal-agent theory,information asymmetry theory and private rights control theory to analyze the status and motivations of listed companies' equity pledges,which lays the foundation for the following storm wind group case analysis.Secondly,by analyzing the 30 equity pledges of the controlling shareholder of Storm Group from 2015 to 2018,the reasons why Feng Xin can pledge the equity multiple times are analyzed,and the possible reasons for the equity pledge of the controlling shareholder of Storm Group are deduced.This article uses the event research method,four ability indicators combined with Tobin's Q value to study the financial aspects of the economic consequences of the equity pledge of Storm Group's controlling shareholders,and compares the four ability indicators of Storm Group with industry data.Non-financial analysis uses the company's business strategy and dividends Policies,etc.Finally,based on the motives and economic consequences of the equity pledge of the controlling shareholder of Storm Group,this article puts forward relevant suggestions to shareholders and regulators,and puts forward the prospects for the following research.The conclusions of the study are as follows: The motives of the equity pledge of the controlling shareholder of the Storm Group are mainly the company's financing needs,the encroachment of the controlling shareholder's interests,the transfer of risks,and the circumvention of the restrictions on the sale of stock rights;Problems and equity pledges are more likely to lead to interest encroachment and negative impact on company value and performance.Based on the above conclusions,this article puts forward three suggestions to strengthen the company's internal governance structure,improve the equity pledge information disclosure system,and limit the controlling shareholder's equity pledge ratio.