Research On ST Kangdexin Controlling Shareholders' Equity Pledge Motives And Economic Consequences

Equity pledge is very popular in the market because of its advantages of low cost,fast speed,undiluted equity and no change of control right,and the difficulty of corporate financing has been plaguing all listed companies.Equity pledge,as a financing method,has become the norm,and controlling shareholders are the main force of equity pledge.However,with the fluctuation of the capital market and the increasingly strict financial supervision,the risk of stock pledge is also rising.Although this way can effectively alleviate the corporate financing problem,the high proportion and frequent pledge of controlling shareholders will transfer negative information to the market,so the research on the pledge behavior of controlling shareholders is particularly important.This paper selects Kang Dexin,once regarded as the representative of excellent listed companies,as the research case,analyzes its motivation from two aspects: meeting the needs of business expansion funds and controlling shareholders' interests encroachment,and analyzes the economic consequences from three aspects: market reaction,market value manipulation and financial performance of the announcement of stock pledge,hoping to be able to pledge for other listed companies Provide some experience and warning.Through the research on the behavior of equity pledge of the controlling shareholders of St kangdexin,it is found that the controlling shareholders of St kangdexin pledge almost all the shares of the listed company in a high proportion,and the financing funds are invested in the carbon fiber industry,which not only disperses the financial investment of the listed company,but also leads to the evil that the financing funds can not be repaid on time due to the investment failure and eventually lose the equity Fruit.Through the event study method,it is found that the market has a strong negative reaction to the equity pledge of its controlling shareholders,and St kangdexin's share price has declined rapidly since May 2018 until the suspension of trading.Second,the stock pledge of the controlling shareholders leads to the earnings management of St kangdexin,and the real earnings management is higher than the accrual earnings management,which intensifies the agency problem between the controlling shareholders and the small and medium shareholders,and also seriously damages the interests of the small and medium shareholders.Third,the behavior of St kangdexin's controlling shareholders who occupy the listed company's funds to make radical investment directly leads to the huge amount of interest bearing liabilities of the listed company,and the high financial expenses also squeeze the company's profits.The research in this article provides ideas for stakeholders to identify the risks that may be caused by the controlling shareholder's equity pledge,and also helps to correctly understand the economic consequences of the controlling shareholder's equity pledge of listed companies.