| Equity pledge financing is sought after by shareholders because of its convenience and high liquidity,and it has become increasingly large in China’s securities market.When controlling shareholders pledged equity,they retained control of the company,but lost the cash flow rights of the shares,resulting in the separation of the two rights.The more shares pledged by the controlling shareholders,the greater the degree of separation between the two rights.As the actual controller of the company,the controlling shareholder has a decisive role in the management of the company.After the pledge of the equity,the controlling shareholder has both the motivation and the ability to avoid risks and occupy the company’s interests through various ways.Therefore,it is necessary to study how to prevent controlling shareholders from using equity pledge to infringe the interests of listed companies and small and medium shareholders.This paper adopts case analysis method,event research method and financial index analysis method.Starting from the two rights separation theory,information asymmetry theory,and signal transmission theory,takes the case of pledge of controlling shareholder equity of Chang Cheng Film for example,Study the risks of pledges.Firstly introduce the equity pledge of the controlling shareholder and the development of the company,analyze the motivation of the controlling shareholder’s equity pledge;Then analyze the equity pledge risk from company,small and medium shareholders,controlling shareholders,financial institutions,and analyze the causes of these risks;through analysis,we found that the pledge of the controlling shareholders leads to the company’s earnings management and benefit transmission behaviors,causing financial risks to the company.Finally,it puts forward suggestions to strengthen the internal management of companies,improve the relevant system of equity pledge,strengthen the risk awareness of financial institutions and small and medium shareholders,and the controlling shareholders should reasonably conduct equity pledge. |
