Research On The Risks Of Stock Pledgeby Controlling Shareholders Of Listed Companies

As a financing method,equity pledge has the characteristics of convenient process and no change of control rights.It has been favored by controlling shareholders of listed companies in recent years.Reasonable use of equity pledge by controlling shareholders can provide support for company financing and solve the company’s shortage of funds.However,with the expansion of the scale of equity pledge,a series of potential risk problems have gradually emerged.Equity pledge sends negative information to the market,which may cause the stock price to fall;when the stock price falls to the liquidation line,if the controlling shareholder fails to redeem the equity in time,it will face the risk of forced liquidation,triggering the transfer of control of the controlling shareholder;at the same time,the equity pledge This exacerbated the separation of the two rights and strengthened the motive of the controlling shareholder to encroach on the company’s interests;finally,if the equity pledge funds are not properly used,the company’s financial risk may rise sharply.In recent years,a number of listed companies have suffered thunderstorms due to the issue of pledges of controlling shareholders’ equity,which has brought the company’s development to a standstill.In this context,it is necessary to study related cases of equity pledge to explore potential risks and countermeasures.This paper selects the listed company Zhengbang Technology as the research object,sorts out the company’s development history and controlling shareholder’s equity pledge situation,identifies the company’s equity pledge risk,uses the event study method to analyze the stock price fluctuations caused by equity pledge and equity pledge liquidation events,and measures the market Risk;calculate the pledged equity liquidation line to analyze the risk of controlling shareholder’s control transfer;the degree of separation of two rights analyzes the controlling shareholder’s interest encroachment risk;use financial index analysis method and Z-Score financial risk model to analyze the company’s financial risk before and after equity pledge.Finally,find out the cause of the risk,and put forward risk prevention countermeasures around the cause.Through the study of this paper,the following conclusions are drawn: First,the use of controlling shareholders’ equity pledge funds for investment activities directly aggravates the company ’ s financial risks;frequent pledges also increase the risk of stock price declines,and the larger the pledge,the worse the stock price performance.At the same time,the company’s continuous losses have cut off the economic resources of the controlling shareholder,and there is a lack of funds to redeem the pledged equity.The forced liquidation of the pledged equity will not only cause the stock price to fall,but also increase the risk of control transfer.In addition,equity pledge reduces the relationship between the controlling shareholder and the company’s interests,and intensifies the risk that the controlling shareholder will use its control to encroach on the company’s interests.Second,due to the continuous losses of the company and the reduction of holdings by the controlling shareholder,it is determined that equity pledge has become a cash-out tool for the controlling shareholder.Third,to deal with the above-mentioned risks,the company should optimize the equity structure and judge the market cycle;small and medium shareholders should improve their professionalism;the China Securities Regulatory Commission and other departments should strengthen the restrictions on large shareholders’ equity pledges and improve the equity pledge information disclosure system.The research results can provide some reference for the case company and other companies to prevent the risk of equity pledge of controlling shareholders,and help promote the healthy and orderly development of equity pledge in my country’s capital market.The innovations of this paper are as follows: In terms of research content,the short-term market risks caused by different scales of equity pledges are compared,and the market risks caused by the forced liquidation of pledged equity are explored;Auxiliary analysis of the risk of transfer of control rights;in terms of research conclusions,combined with the active reduction of holdings by controlling shareholders,it provides a basis for the motivation of controlling shareholders to use equity pledges to cash out in disguise.