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

At present,the main financing channel for Chinese enterprises is traditional commercial banks.Due to the requirements of risk management and control,banks are strict in reviewing loan conditions.They usually consider the nature of enterprises and require enterprises to provide mortgages or guarantees.Therefore,the possibility of approval of private enterprise loans is even more small.Equity is more liquid than fixed assets with poor liquidity.Therefore,under the current situation,equity pledges are highly respected by enterprises,and more and more enterprises frequently use equity pledge to raise funds.At the same time,various risks after the pledge of equity have also emerged.In 2018,the frequent occurrence of equity pledge risks and the introduction of new pledges for listed companies have become the focus of attention of all parties.Therefore,this paper takes the private listed company Zuoli Pharmaceutical as the object and conducts research on the economic consequences of the controlling shareholder's equity pledge,hoping to give certain warnings and suggestions to private listed companies and regulatory agencies.In the process of writing,this paper firstly sorts out the literature related to equity pledge at home and abroad and defines and expounds the concepts,theoretical basis and performance evaluation methods related to equity pledge.Secondly,it makes a holistic analysis of the status quo,motivation and existing risks of the listed company's equity pledge.Then,the company introduced Zuoli Pharmaceutical Co.,Ltd.to introduce the governance structure of Zuoli Pharmaceutical Co.,Ltd.and the controlling shareholder pledge process,and analyze the risks.In turn,explore the economic consequences from both financial and non-financial aspects.The non-financial effect is cut from the perspective of the company's operation andmanagement.The short-term use event research method for financial effects,the four-capacity analysis framework for long-term use of financial indicators,and Tobin Q comprehensively reveal one of the controlling shareholders' equity pledge from two aspects: accounting indicators and market indicators.The series of problems affects the company's short-term and long-term value.On the basis of the above analysis,the following research conclusions are drawn.This paper considers that there are problems in the internal governance mechanism of Zuoli Pharmaceutical.On the onehand,it causes the interest violation behavior after the controlling shareholder pledges,on the other hand,the equity pledge leads to the control and cash flow rights.Separation reduces the risk of encroachment,so that the controlling shareholder's equity pledge will put its own interests in the first place in the company's operation and management,resulting in a series of agency problems.In the short-term,the stock price and long-term impact on the company's performance and value have a significant negative impact on the company and investors' interests.Finally,the paper puts forward the following specific suggestions: private listed companies should improve the corporate governance mechanism,and the regulatory agencies should introduce special regulations to regulate the equity pledge behavior as soon as possible to control and evade the risks brought by the controlling shareholders' equity pledge.