Research On The Impact Of Controlling Shareholders' Equity Pledge On Enterprises

Equity pledge financing,as one of the most popular financing methods in the current capital market,shows a very strong development trend in the A-share market.On the premise of retaining control of the listed company,the controlling shareholder will pledge the equity it holds,supplement liquidity,expand its own financing channels,and reduce financing costs.But the risks behind equity pledges cannot be underestimated.When the company's equity is close to the liquidation line,the company will face the risk of transferring control.When the market value of the enterprise is stable,the controlling shareholder may also use this to hollow out the company and damage the interests of small and medium shareholders due to the separation of control and cash flow rights caused by the pledge of equity.And when a company's high percentage of its equity is pledged,it will have a significant impact on the company's operating performance and corporate value.This article adopts a case study method and takes Chongyi Zhangyuan Tungsten Co.,Ltd.,a non-ferrous metal processing industry,as the research object,and specifically analyzes the degree of separation of the two rights before and after the equity pledge,the company's operating performance,financial risks,enterprise value,and equity pledge Short-term market response after the announcement and changes in six areas of R & D investment.In terms of measuring its financial risk,this article finds that although its financial risk is in a controllable range,it has increased significantly with the rise in equity pledge rate.Changes in corporate value,whether in the horizontal Tobin Q value comparison or the vertical EVA value comparison,have shown a tendency to decline after a high proportion of equity pledge.However,Zhangyuan Tungsten's investment in innovative R & D after listing has not shown a significant inhibitory effect as demonstrated by previous studies.This means that a high percentage of equity pledges will have an impact on enterprises and will have different effects for different enterprises.The purpose of this study is not to demonstrate the advantages and disadvantages of equity pledge financing,but only to hope that companies should be cautious to use equity pledge financing and pay close attention to the impact of equity pledge financing on their own companies.