The Study On Tunneling Behavior After The Controlling Shareholder's Stock Pledge In The NEEQ

In recent years,with the accelerated expansion of the NEEQ,more and more small and medium enterprises have been attracted to enter the capital market.Equity pledge gets the favour of company's shareholders because of the advantage of cashing out in advance without losing control of the company.Compared to listed companies,the enterprises listed in the NEEQ have higher concentration of shareholding,the principal-agent effect between the major shareholders and small shareholders being more obvious,the contronlling shareholders are a higher likelihood of moral hazard after the equity pledge especially when they are still the operators of the company.Based on the theory of asymmetric information and principal-agent theory,this paper theoretically analyzes the main reason why the major shareholders have the motivation of tunneling is that large shareholders increase the degree of separation of control rights and cash flow rights through equity pledge,the information asymmetry between large shareholders and small shareholders provides convenience for the major shareholders' tunneling behaviors.In this paper,we use the case of Feng Sheng Yang company as the research object for analyzing the reason of equity pledge exacerbating tunneling,implementation path of tunneling and the impacts on staheholders.As a result,we find that equity pledge can aggravate the separation of two rights,and reduce the cost of shareholders' tunneling,remove the stock price risk to the pledgee,the NEEQ companies' lower shell value being also an economic incentive to empty the company.Big shareholders often use occupying funds and connected guarantee to transfer interest,using the "bad debts" and other subjects of cardiopulmonary bypass is more covert tunneling.After equity pledge,controlling shareholder gains more than pays of tunneling commany,but minority shareholders and the pledgee shareholders pay the price for the tunneling.Finally,from the point of company we find out that poor internal governance and information disclosure facilitates the main shareholders' embezzlement,and puts forward some corresponding suggestions.