Research On The Risk Of Equity Pledge Of The Controlling Shareholder Of Rendong Holdings

Equity pledge has broadened the financing channels of major shareholders and is favored by them for its efficiency and convenience.Moreover,the emergence of equity pledge alleviates the financing difficulty of small and medium-sized private enterprises to a great extent.However,the application of equity pledge is immature in China's capital market.The hidden risks have been continuously exposed in recent years,such as moral hazard,high leverage risk,control transfer risk,liquidity risk,etc.With the constant adjustment of financial deleveraging and the continuous strengthening of financial services to the real economy,how to make the equity pledge play a positive role and avoid hidden risks,we need to trace the roots and conduct risk research from specific equity pledge behavior.Under the realistic background of the gradual normalization of equity pledges and the frequent occurrence of stock price crashes,this paper selects Rendong Holdings Co.,Ltd.as a case study company,using comparative analysis,event research,risk tree search and other methods to conduct risk research on the equity pledge process of its controlling shareholder Tianjin Heyou Technology Co.,Ltd.On the road of the transformation of Rendong Holdings,the controlling shareholder Tianjin Heyou Technology Co.,Ltd.used the serial equity pledge financing mode to conduct highly leveraged financing.Although this approach facilitates the development of listed companies,it also hides greater risks.In 2018,the stocks of Rendong Holdings had two flash crashes and the stock price plummeted.This high-leverage operation of Tianjin Heyou Technology Co.,Ltd.not only brought risks to itself,but also brought risks to the listed companies involved in pledged equity.In addition,the pledgee and the financial market were also affected.Based on the risk management process,this paper conducts the risk identification,risk assessment,risk response,and effect evaluation of Heyou Technology's serial equity pledge.Finally,based on this case,corresponding suggestions on risk prevention and control are put forward for each participant of the equity pledge.Through the analysis and research of the case in this paper,it is found that the risk of Heyou Technology's serial equity pledge operation includes liquidation risk,control transfer risk,liquidity risk,market risk and financial risk.These risks are caused by a combination of factors,and affect all stakeholders in the equity pledge.The research of this paper can not only promote the company to improve the governance and operation level,but also provide experience and lessons for all parties involved in equity pledge,and provide reference for them to make corresponding risk prevention and control.At the same time,the research of this paper also helps to improve the existing relevant regulatory system,regulate the pledge behavior of major shareholders,so that equity pledge can play its positive role and promote the healthy development of the market.