A Research On The Economic Consequences Of The Pledge Of Major Shareholders' Equity

In recent years,equity pledge behavior of listed companies has become more and more common in China.This new financing method,which aims at financing and investment and does not change shareholders' control over the company,has brought great benefits to shareholders,especially controlling shareholders,in terms of capital acquisition.Although equity pledge financing is convenient for controlling shareholders to obtain funds,the separation of control right and cash flow right has become a problem that controlling shareholders have to consider.This paper takes the pledge behavior of controlling shareholders of Boomsense Technology Co.,Ltd.as the research object,and analyzes it based on principal-agent theory,information asymmetry theory and control right theory.First compared before and after the equity pledge two rights separation degree,and then combined with the listed company information disclosure of equity pledge,choose according to enterprise actual collateral calculation model,calculation of corporate excess accumulative total yield,can be more intuitive,deeply reflects the equity pledge before and after the case enterprise economic consequences,and finally using financial data of listed companies,with the help of the tobin Q model to measure the enterprise value,and use the enterprise debt paying ability,profitability and cash flow indicators such as further analysis the controlling shareholder equity pledge's impact on corporate performance.Through the above analysis,this paper,the main conclusions are as follows:first,equity pledge to cash flow right of controlling shareholders is restrained,and the control is not affected,the separation of control and cash flow rights constantly caused many problems,will encourage controlling shareholders encroach on minority shareholders rights and interests of small and medium-sized shareholders suffers a loss.Ii.From the perspective of operation and management behaviors after equity pledge,listed companies are faced with greater risk of control transfer and significantly reduced operation stability under the high proportion of equity pledge of controlling shareholders.Under the condition of high pledge proportion,if the pledgor in maturity date failed to redeem the pledge is,will face the pledged sharesthe risk on the auction,which means the pledgor holding ratio decreases,on the one hand,also means that may introduce new shareholders,the above two points are represent the corporate control transfer,in extreme cases actual controllers may change,which faces a larger change of company business strategy and way of potential risks.3.The pledge of large proportion of stock rights of controlling shareholders will have a negative impact on the performance and market value of listed companies.Large scale and continuous pledge,often means that the controlling shareholders own funds shortage,to make up the shortfall,control of the controlling shareholder can use their own advantages,through the "tunnel effect" to grab the interests of the listed company to meet their own needs,this behavior will often cause the company performance is impaired in the later stage management,thus affect the market value.Based on the above conclusions,this paper puts forward corresponding Suggestions from the aspects of perfecting corporate internal governance,formulating policies and regulations,and strengthening the supervision of financial institutions,in order to give better play to the advantages of the current equity pledge system.