Research On Benefits Expropriation Behavior Under The Equity Pledge Of Controlling Shareholders

In the process of business operation and development,financing plays a very important role.Due to the increasing demand for daily financing of enterprises and the rapid development of financial markets,different financing tools have begun to emerge.As a kind of pledge of rights,equity pledge has become an important financing tool in China's capital market.In recent years,equity pledges have been in a state of expansion and growth.According to Wind,at the end of June 2018,the market pledge market value reached 547.327 billion yuan,the market pledged shares 624.94 billion shares,and the major shareholder pledge shares 594.91 billion shares.More and more controlling shareholders in listed companies have begun to use equity pledge for financing,and the controlling shareholder has become more and more concerned about its equity pledge due to its special status in listed companies.The biggest advantage of equity pledge is that it can convert the static equity of the book into usable financial resources without diluting the company's control rights to meet the company's financing needs.Although the controlling shareholder's equity pledge is the controlling shareholder's own business,its equity pledge behavior will also affect the listed company.Equity pledge,as an emerging financing method,its advantages are affirmative,but its shortcomings and risks have not received enough attention.There are also many problems in the process of the company's equity pledge.As the equity held by the controlling shareholder is pledged,the company's pledge rate will continue to rise.This kind of financing method closely integrated with the equity and will directly affect the separation of the two powers of the controlling shareholder of the company,thus triggering the majority shareholder about the issue of the encroachment of listed companies.At the same time,if the controlling shareholder conducts frequent and large-value pledges,it will inevitably bring many economic consequences to the company,including different degrees of negative impact on the company's financial performance and business performance.This paper briefly summarizes the current state of equity pledge in China,and analyzes the equity pledge behavior of the case company by case analysis.This paper selects FSY Company as the case company,and studies the controlling shareholder's equity pledge behavior from the perspective of interest encroachment.Combining the theory with the case,we study the motives,encroachment methods,economic consequences and the reason of interest encroachment of equity pledge.Through research,it is found that for controlling shareholders,they are often reluctant to obtain funds through financing methods that may weaken their control,so they will prefer the option of equity pledge;for some controlling shareholders with bad intentions,they often use the form of capital occupation and related guarantees for interest encroachment.This paper gives some inspirations and suggestions on how to prevent the controlling shareholder from encroaching on the interests of listed companies through equity pledge,which has certain practical significance.Due to trade secrets and personal privacy,the names of people and companies mentioned in this paper are all pseudonyms.