A Case Study On The Transfer Of Control Right Caused By Share Pledge

Equity pledge is increasingly favored by enterprises and financial institutions for its advantages such as low cost,convenience,and easy liquidity of equity.For controlling shareholders,obtaining financing through equity pledge to meet individual needs will not lose control of the company,so some major shareholders will frequently pledge their own shares to obtain financing.Although the controlling shareholder still has the right to vote on the pledged shares after the pledge of the shares,and does not affect the control of the company's operating decisions,the equity pledge also has the risk of transfer of control rights while obtaining financing.When the equity of the controlling shareholder declines too much during the pledge process,the pledgee will request additional pledges to reduce the risk when the warning line is reached.When the stock price falls to the liquidation line,the pledgee will force the pledge to sell To ensure the safety of funds.Therefore,it is of great practical significance to study the relationship between the controlling shareholder's equity pledge and the transfer of control rights of listed companies.First,this article systematically elaborates the theoretical background and significance of a case analysis study on the transfer of control rights caused by equity pledge transactions in China.The literature and data have been thoroughly combed and analyzed,and the main research theoretical ideas,research methods and the full-text framework of this paper are put forward.Second,this article elaborates the definition and related basic concepts of listed company equity pledge and the transfer of control rights of listed companies in detail.The theoretical content includes the basic definition,characteristics,advantages and motivation of listed company equity pledge,and the scope of control transfer Definition and its approach,and the basic principles of the transfer of corporate control caused by the pledge of equity in listed companies.Regarding the definition and motivation of controlling shareholder's equity pledge,this article analyzes in detail from the three main perspectives of his personal demand for funds,the peculiarities and advantages of equity pledge,and maintaining company control.The main reasons for the pledge of corporate equity.This paper also analyzes in detail the main reasons for the transfer of corporate control rights caused by the pledge of listed company equity.Finally,it further combs the concepts of information asymmetry theory,control rights transfer theory,and principal-agent theory.Third,this article uses the case analysis method to take Rongke Technology Co.,Ltd.(hereinafter referred to as the company)as an example to analyze the driving force of the company's controlling shareholder's equity pledge and the analysis of the impact of the transfer of control rights on the company's operating performance.At the same time,the pledge of equity and the transfer of control are combined to deeply analyze the impact relationship and connection between the two.Regarding the impact of the transfer of control rights on the company,this article analyzes the short-term market response and the company's operating performance.First,use the event analysis method to calculate the excess return of the company's stock price relative to the market index within 10 days before and after the transfer of control.Finally,analyze the calculated results to obtain the short-term market response to the company caused by the transfer of control;then use financial indicators.The method analyzes the changes in the company's profitability,operating capacity,and solvency after the transfer of control.Fourth,after a full review analysis of the equity pledge and the transfer of control rights of the major shareholders of Rongke Technology,several conclusions are drawn: First,the equity pledge will adversely affect the company's stock price.In this case,the higher the proportion of the controlling shareholder's equity pledge The corresponding stock price will be lower,and when the stock price falls to the warning line,the controlling shareholder will continue to pledge additional equity at the request of the pledgee,which will further increase the proportion of equity pledge,thereby forming a vicious cycle of "equity pledge-stock price decline-supplementary pledge" The second is that equity pledge will cause the transfer of control.Taking the company Rongke Technology as an example,the controlling shareholder's equity pledge ratio is too high.In the case of the stock price plummeting,it has to choose to actively transfer the equity to raise funds to release the stake and avoid equity Greater harm caused by pledged short positions;third,the transfer of control will have a positive impact on listed companies,such as the short-term market response of stock prices,the company's operating performance and corporate governance structure will be improved and enhanced after the transfer of control.Finally,this article gives three suggestions: one is to improve the transparency of disclosure of listed companies' equity pledges;the other is to improve the risk management and control mechanisms of listed companies;the third is to improve the laws and regulations related to equity pledges at the national level and strengthen banks and securities.Joint supervisionbetween companies and other financial institutions.