Research On The Motives And Economic Consequences Of Private Listed Companies' Controlling Shareholders' Equity Pledge

In recent years,the equity pledge has become a financing tool for most enterprises because of its many advantages,such as low access requirements,simple process,few constraints,easy trading of shares and easy valuation.According to WIND China Financial Database,as of the end of 2018,there were 2008 listed companies with equity pledge in China within one year,including 1,637 private enterprises,accounting for 81% of all pledge companies,with a total scale of 4.6 trillion Yuan,accounting for the total share capital.10% of the company can find that private listed companies are the main force for equity pledge.Equity pledge brings benefits to private enterprises,but it also brings certain risks.In particular,with the implementation of new regulations for reducing and lowering leverage in early 2018,the risk of stock pledges will increase.From the original intention of the financing development of the controlling shareholder's pledge of equity,the controlling shareholder has no fault in order to meet his own financing needs.However,too frequent and super-high proportion of pledges will only bring anxiety and panic to the market.This paper mainly focuses on the case study method,and chooses the private listed company with distinctive representative--Hua Ying Technology as the case study object.According to the statistics of the distribution of equity pledge trading industry,the listed companies have the largest number of private enterprises with equity pledge transactions,accounting for 58.24%,ranking first in the statistics industry.At the same time,Hua Ying Technology is a major global manufacturer of core flat panel display components and has certain representativeness in the electronics manufacturing industry.Based on the previous studies,this paper mainly analyzes the following contents: Firstly,it analyzes the pledge mechanism and theoretical basis of equity pledge.Secondly,from the three aspects of the status quo,motivation and risk of equity pledge of private listed companies,the current development status of the equity pledge of all A-share listed companies is reviewed,and the overall development level of private pledges of private listed companies is examined.Thirdly,taking the private listed company Hua Ying Technology as an example,the paper analyzes the process of equity pledge of the controlling shareholder of the case enterprise,and starts from the equity structure of the case enterprise,deeply explores the motives of its controlling shareholder pledge,and uses the event research method and financial indicators.The law thoroughly analyzes the economic consequences of the controlling shareholder's equity pledge to the listed company.Finally,on the basis of the implementation of the new regulations,it has verified certain limitations of its existence,with a view to providing relevant departments with suggestions for further improving relevant laws and regulations.The main contribution of the article is that through the analysis of specific cases,the study found that the introduction of the new regulations in 2018 did not produce much substantive effect,only slowing down the pace of the company's equity pledge,and did not fundamentally solve the problem.The standardization of the new regulations on private enterprises is only implemented in accordance with the requirements of state-owned enterprises,and there is no substantive breakthrough.This paper believes that it is necessary to further improve the relevant laws and regulations to the franchise of the pledge business,and achieve no dead angle monitoring of equity pledge financing.It further strengthens the supervision of the pledge disclosure link,focusing on the flow of pledge funds,and paying attention to whether the controlling shareholders have encroached on the interests of listed companies in order to protect the interests of small and medium shareholders and the effective operation of the capital market.In the end,the purpose of promoting the further development of the equity pledge business will be achieved,so that it can be better used by private listed companies.