The Impact Of The Controlling Shareholders’ Stock Pledge On The Coporation Value Inprivate-owned Listed Companies

The key point about corporate governance in the firms is that there exists anagency problem between top management and shareholders. However, along with thedevelopment of stock market, more and more scholars have focused their attention onanother agency problem between controlling and minority shareholders. It’s Theseparation of control right and cash flow right, which leads to serious interest conflictsbetween controlling and minority shareholders and result in controlling shareholdersusing occupy company funds, illegal guarantee to hollow listed company and damagethe interests of minority shareholders.In recent years, the equity pledge financing type get the favor of especiallycontrolling shareholders of shareholders of listed companies. However, there is a risk oflisted companies and shareholders. Because of controlling shareholders’ normal pledgecan’t repay debt on schedule, shares may be trust company or a bank to freeze and becompulsory auction, causes the control to slip. In some ways, Equity pledge financingbehavior also reflects the potential motive of controlling shareholders transfer.Highlights of the ownership structure is brought by the separation of cash flow rightsand control of agency problems, and control of equity pledge is likely to deepen and theproblem of agency for cash right deviation, controlling shareholders might be morehidden by means of implementation of hollowed out for the interests of the minorityshareholders.Based on the collection, analysis, and based on a vast amount of literature at homeand abroad for reference, combine the domestic current situation of the equity pledge,the big shareholders equity pledge is an effect on the value of listed companies as thestarting point of research, the equity pledge moral risk, market risk, risk disposal ofyaxing chemical major shareholder equity pledge on case analysis research, discussesthe existence of large shareholders emptying, operating performance deterioration andshare price volatility, and so on and so forth, according to the research conclusion putforward policy Suggestions, in order to study on equity pledge and hollowed behaviorin China provide a useful supplement.This paper consists of five chapters:Chapter1is the introduction. The paper introduces the research background and thepresent situation of equity pledge. Based on this, it introduces the significance of theresearch, research issues and framework, and research improvements and innovations. Chapter2is the theory summary. This chapter on the one hand to comb and reviewof related literature at home and abroad. On the other hand, this paper introduces thespecific meaning of pledge of equity, the risk of equity pledge, and the value of theequity pledge.Chapter3is the introduction of YaXing chemical. In this chapter, first makes simpleintroduction background of Yaxing Chemical enterprise, combing its equity pledge inrecent years again, finally introduces the situation of the controlling shareholdersoccupy the fund.Chapter4analyzes the influence of major shareholder equity pledge on the listedcompany value. First of all, through calculation and analysis the degree of theseparation of control right and cash flow right,including before and after the pledge, toexplore the hollowed motive, and specific analysis of the big shareholders occupy wayand its influence on the listed company financial. And then, using the event studymethod to calculate the excess return rate and cumulative excess return rate underpledge Yawing Chemical price short-term market reaction, and the use of market valueand book value ratio analysis Yawing Chemical changes in market value. Finally, theanalysis of control transfer under the risk transfer of equity after the listed companyfinancial position.Chapter5is mainly about prevention Suggestions for the economic consequencesof Yawing chemical, which results from equity pledge. To regulate major shareholdersequity pledge financing, ensure the safety of the governance of listed companies need tomake up for the system and regulatory loopholes as soon as possible, including law,regulators, and the listed company governance mechanism, etc.