Study On The Financing Risk Of Major Shareholders’ Equity Pledge Of Galaxy Biomed Investment Co.,Ltd.

With the progress of China’s capital market,the financing channels of major shareholders of listed companies are also increasingly rich.Owing to its flexibility and efficiency,and relatively few supervision,equity pledge has developed vigorously in recent years,and has become one of the most popular financing methods for large shareholders of listed companies.However,although equity pledge belongs to the behavior of shareholders,this financing mode is affected by the fluctuation of company’s stock price,which involves the transfer of shareholders’ control rights to listed companies,and will have an impact on listed companies and their minority shareholders.The listed companies in Shanghai and Shenzhen Stock Exchanges have many phenomena of dominant shares and concentrated ownership.For listed companies,the existence of controlling shareholders may have both positive incentive effect and negative occupancy effect.Under the incentive effect,the controlling shareholders supervise the management effectively through the control right to help improve the company’s performance;on the contrary,under the embezzlement effect,the large shareholders use the control right to manipulate the operation of the enterprise,only considering their private interests,while damaging the value of listed companies.Under the embezzlement effect,the conflict of interests between the large shareholders and the small shareholders will be aggravated.So,what kind of performance will the controlling shareholders take under the threat of control transfer?To sum up,the study of equity pledge of major shareholders has strong theoretical value and practical significance.This paper takes the pledge behavior of the major shareholders of Galaxy Biomed as the case background,aiming at discussing the risk of the pledge to the listed companies,and ultimately leading to the impact on the interests of the small and medium shareholders,and puts forward relevant suggestions on how to protect the interests of the small and medium shareholders and improve the risk early warning of the small and medium shareholders.Firstly,by introducing the corporate background and ownership structure of Galaxy Biomed,this paper reviews the frequency and proportion of equity pledge of major shareholders,combines with the analysis of its financing motivation,and summarizes the company announcement and stock market performance.It is found that during the period of equity pledge,the major shareholders embezzle the interests of listed companies.This paper elaborates on the ways of infringement of interests.Secondly,three risk types in the pledge of Galaxy Biomed Equity are analyzed.Computing the relevant data,we can find that,with the increasing share pledge ratio of Galaxy Biomed Actual Controller,the degree of separation of control rights and cash flow rights of large shareholders is aggravated.At the same time,through the analysis of the solvency,operation ability and profitability of Galaxy Biomed High Frequency Pledge,we find that the controlling shares After obtaining funds through equity pledge,Dong has not improved the operating conditions of listed companies,and even has a declining trend.Moreover,through the prediction of stock price fluctuation,pledge price and liquidation line,it further confirms that large shareholders use equity pledge to embezzle their interests.In this case,it causes the moral hazard,disposal risk and market risk of equity pledge of major shareholders.In view of the above situation,this paper puts forward the following suggestions:(1)strengthen the supervisory role of enterprise supervisors,improve the companysystem related to equity pledge;(2)improve the quality of disclosure information,strengthen the right to know relevant information of small and medium shareholders and pledgee stakeholders;(3)strengthen the role of external supervision,and improve the quality of equity pledge.The proportion of pledge shall be strictly controlled and key information such as the price and amount of pledge shall be disclosed in time.