A Study On The Encroachment Of Interests By The Majority Shareholders' Pledge

At present,major shareholders 'equity pledge financing has become a common phenomenon in the capital market.According to wind database statistics,as of the end of August 2019,the number of major shareholders' pledged shares was 602.472 billion,accounting for 7.34% of the shares held by major shareholders.On the surface,the pledge of equity by major shareholders is an individual act and is not directly related to the listed company,but the equity pledge of major shareholders transfers the risk of equity value fluctuations to the pledgee while obtaining funds,which increases the control and security of listed companies.The separation of cash flow rights reduces the cost of encroaching on the interests of small and medium shareholders,and may become a means for large shareholders to hollow out listed companies.The act of encroachment on the interests of listed companies and small and medium shareholders by major shareholders is a financial fraud and ultimately affects the overall interests of listed companies.In recent years,major shareholders of listed companies such as Star Power,Chaori Solar,Concord and others have used equity pledges to hollow out listed companies,which has caused serious losses to listed companies and stakeholders.This article analyzes whether the pledge of stock rights will cause the "empty" behavior of major shareholders and how it affects listed companies through specific cases.The selected case company ST Yinyi is a pioneer in the transformation of real estate companies under the background of real estate regulation.Due to the economic downturn and transformation,the company has fallen into a debt crisis.The controlling shareholder Yinyi Group has filed for bankruptcy and reorganization,and has been accused of emptying listed companies.Certain typicality.In addition,this article selects relevant financial indicators to analyze the changes in the degree of interest appropriation before and after the equity pledge of listed companies,and uses the event research method and Richardson residual model in the case to analyze the company's value changes and inefficient investment of listed companies after the pledge of major shareholders Behavior,expanding the breadth of research,and giving some inspiration and suggestions on how to prevent major shareholders from encroaching on interests through equity pledges,which has certain practicalsignificance and is conducive to the monitoring of major shareholders 'encroachment by China 's capital market.Research on equity pledge.In this article,in the analysis of the motives of ST Yinyi's major shareholder's equity pledge,the financial status of listed companies before and after the pledge,the extent of interest appropriation before and after the pledge,and the economic consequences,the separation of control rights and cash flow rights has resulted in the appropriation of benefits by major shareholders.Motivation,hollowing out listed companies through huge dividends,connected transactions,related guarantees,and occupation of listed company funds,seriously harmed the interests of small and medium shareholders.Moreover,pledge of equity will cause the financial status of listed companies to deteriorate,cause the company's value to decline,and cause unreasonable overinvestment.To this end,this article puts forward specific recommendations from the regulatory level,the company level,and the small and medium shareholders level.The regulatory level includes strengthening the information disclosure norms,increasing the punishment for violations of the letter,and improving the risk supervision system;the company level is to establish equity Check and balance mechanism,improve the information disclosure system,strengthen the supervisory function of the board of supervisors,and improve the check and balance mechanism of the board of directors;small and medium shareholders propose to strengthen investor education and develop institutional investors.It is undeniable that this article may also have some shortcomings and deficiencies.For example,the data involved are mostly manually obtained from the Oriental Fortune Choice database or the annual report of the case company,and then certain processing is performed.The acquisition of information about ST Yinyi's case-related economic events mainly comes from the information that has been disclosed by listed companies,and the internal economic events of the company may actually be more complicated and involve a wider range,which needs to be further analyzed.