Research On The Economic Consequences Of Controlling Shareholder's Stock Right Pledge

Since the liquidity of listed company shares has been greatly improved with the share-trading reform,more and more listed company shareholders have financed by pledgeing their company shares.The major shareholder of a listed company,especially the controlling shareholder,can inject “vigor” into the originally static equity by pledging the held equity,making it a liquidity that can be flowed,and investing the funds that have been pledged to support the company's development.The project to enhance the value of the company.At present,the academic community has no clear conclusion on the economic consequences of the high proportion of equity pledge of the controlling shareholder of the listed company.The reason may be that the current laws and regulations on the pledge of equity in China are not perfect,and the level of state supervision needs to be improved.In the current situation that there is no clear conclusion on the impact of the high proportion of equity pledge of the controlling shareholder of the listed company on the company itself and the minority shareholders of the company,this paper uses case study to explore the economic consequences of the high proportion of equity pledge of the controlling shareholder of the listed company.It will help us to have a deeper understanding of the behavior of the controlling shareholder's equity pledge of listed companies,and at the same time make recommendations for the supervision of the state policing of the equity pledge,so as to realize the rational allocation of market resources and promote the sound development of equity pledge.This paper summarizes the domestic and international research results on the issue of equity pledge agency,equity pledge motivation and risk,and the impact of equity pledge on company performance and value.At the same time,based on the theory of control rights,information asymmetry and principal-agent theory,The economic consequences of the pledge of the controlling shareholder's equity on the company and the small and medium shareholders will be discussed in depth from the perspectives of the mechanism analysis of the impact of the pledge of the controlling shareholder's equity on the company,the short-term market reaction of the pledge of the equity,the long-term performance of the company and the change of the company's value.Through research,it is found that after the controlling shareholder of Harbin Gloria Pharmaceuticals Co.,Ltd is financing through equity pledge,the financial performance and value of the company are decreasing,and the equity pledge of the controlling shareholder conveys negative information to the market,and at the same time,the company pledges financing through the controlling shareholder equity.Mergers and acquisitions have become the main source of the company's revenue and net profit,the performance of the asset has fallen sharply,accounting for more than 85% of the company's net assets,the huge goodwill is facing the risk of impairment,the company's share price has fallen sharply,resulting in the controlling shareholder and the actual controller The shares were frozen by the judiciary,which has had a very serious impact on the company.Specifically:(1)The market is not optimistic about the pledge of the equity of the controlling shareholder of the company,which may be caused by the natural information asymmetry between the controlling shareholder of the listed company and the market investor.(2)The controlling shareholder of Harbin Gloria Pharmaceuticals Co.,Ltd used the pledge funds for the company's M&A expansion,which had a bad influence on the company's development.The assets of the M&A did not reach the expected income,which made the company bear huge financial pressure on the company's development.Has a negative impact.The profitability,solvency,operational capability and growth capacity of the main business of Harbin Gloria Pharmaceuticals Co.,Ltd showed a downward trend during the high proportion of the controlling shareholder's pledge of shares,and the value of the company was also damaged.(3)The controlling shareholder of Harbin Gloria Pharmaceuticals Co.,Ltd continuously reduced the level of cash dividends that were originally lower than the industry average during the holding period of the high proportion of pledges.The reason was that the controlling shareholders avoided the reduction of the cash flow rights in the equity pledge.Large-scale dividends will make the risk of cash loss,but this will infringe the interests of small and medium shareholders,and make small and medium shareholders passively bear the risks brought by high proportion of equity pledge,which triggered the proxy between major shareholders and minority shareholders.The problem arises.