| In recent years,due to the advantages of fast and convenient equity and simple procedures,the equity pledge has gradually become a favored financing method for shareholders of listed companies in the face of lack of funds.However,while the equity pledge effectively alleviates the financing constraints of listed companies,it also brings about problems such as “short-term management behavior”,“control transfer risk” and “share price collapse risk”.In particular,when the “excessive” equity pledge behavior is widespread among the internal shareholders of a listed company,the potential business risk of the enterprise will also increase.In addition,affected by the Sino-US trade war in the first half of 2018,many listed companies experienced serious declines in performance,resulting in a deep correction in China’s A-share market.Many listed companies with high pledge rates have to be forced to face pledge of equity because of the stock price crash.The risk of closing the position.Therefore,in this economic environment,this paper explores the economic problems brought about by the “excessive” equity pledge of internal shareholders of listed companies,which will help investors and regulators to pay attention to “excessive” equity pledge behavior and be effective.Preventing internal shareholders from encroaching on the interests of listed companies through equity pledge,reducing the series of operational risks brought about by this,thereby protecting the listed company’s operating performance and company value from infringement,and has a certain significance for maintaining a healthy and good capital market order.Starting from the implementation motives,this paper finds that there are often more than one motivation for the internal shareholders of listed companies to “excessive” equity pledge,and the motive of pledge determines the economic impact of pledge behavior.In other words,identifying the true motive behind the “excessive” equity pledge from the source will help prevent the various risks that result.Subsequently,this paper analyzes the motives and implementation methods of excessive equity pledge and their impact on the operating performance of listed companies.It is found that when internal shareholders conduct high-value equity pledge financing,especially when internal shareholders use equity pledge financing for individuals.When investing in a third party,due to concerns about liquidation,internal shareholders will use control to implement “short-term business operations” on listed companies,which is not conducive to long-term stable operation of the company.These “short-cut” behaviors will send a bad signal to the capital market,causing panic investors to sell stocks,causing pledged equity to hit the forced liquidation line,bringing hidden dangers of control transfer,and ultimately triggering a “share price crash crisis.” In addition,the study also found that the “excessive” equity pledge may also be a panic reaction of internal shareholders to carry out wealth preservation under pessimism..The writing ideas of this paper are mainly divided into the following parts: The first part is the introduction.This part mainly introduces the research background and significance of this paper,focuses on the development of equity pledge,and briefly expounds the research ideas and research methods of the article.The literature review mainly focuses on the transfer of control rights brought by scholars at home and abroad on equity pledge.Research status of risks,stock price crashes and prevention strategies.Secondly,it is a theoretical overview of the “excessive” equity pledge of listed companies.This part defines the concept of “excessive” equity pledge,analyzes the behavior motive,implementation method and economic consequences of implementing “excessive” equity pledge from the theoretical level,and expounds the theoretical basis of the research basis.Furthermore,it is a case study of the “excessive” equity pledge of the shareholders of Kingee Culture.This section introduces the company profile of Kingee Culture,including company profile,shareholding structure and governance structure.It also briefly reviews the current situation of company pledge,the issue of control transfer and the stock price crash.In addition,it is a case study of the “excessive” equity pledge of Kingee culture shareholders.This part analyzes the economic background,choice motives and evolution,implementation process,economic consequences and governance countermeasures of the internal shareholders of Kingee Culture to implement the “no stocks and non-holding” excessive equity pledge.Finally,it is the conclusion and inspiration of this paper.By combining the theoretical research of equity pledge and the case analysis of the “excessive” equity pledge of the internal shareholders of Kingee Culture,the conclusions are drawn,which has brought about research implications for listed companies and regulatory authorities to carry out risk prevention.In the case analysis part,this paper combines the specific case of Kingee Culture’s “no stocks and no pledges”,and deeply discusses the motives and implementation process of the long-term and frequent high-value equity pledge behavior of Kingee culture shareholders.The study found that equity pledge has become a means for some "missing" shareholders to encroach on the company’s interests or to implement a strategic retreat.In the short run,this behavior will aggravate the degree of control of Kingee culture and the separation of cash flow rights,which affects the market value of Kingee culture to a certain extent.In the long run,long-term frequent high-value equity pledge behaviors are likely to trigger control transfer risk and stock price collapse risk,which will ultimately affect the listed company’s operating performance and company value.Therefore,the paper concludes with the enlightenment that listed companies should strengthen the control over the internal shareholder pledge behavior,disclose the information on the equity pledge in a timely and complete manner,and improve the risk early warning mechanism;in addition,the regulatory authorities should further restrict the pledge ratio and improve the relevant supervision.The system strengthens the external supervision of the pledge of equity. |
