On The Economic Consequences Of The Equity Pledge Of The Major Shareholders Of Gloria Pharmaceuticals

With China's capital market developing rapidly,equity pledge has gradually become one of the important financing channels for listed companies' major shareholders.In recent years,it has also shown a blowout situation.As of August 2018,there were 3 464 A-shares in China's Shanghai and Shenzhen stock exchanges,which accounted for 97% of the total number of A-share listed companies in China.The market value of pledged stocks was about 5 trillion yuan.Accounting for about A shares,the total market value is 10.35%.Overall,the phenomenon of equity pledge of A-share listed companies in China is still very common.From the industry point of view,the total number of equity pledges in the electronic components,machinery industry,and pharmaceutical manufacturing industry is high.But from the latest pledge market value,pharmaceutical manufacturing is the highest.With the increase in the proportion of equity pledges by major shareholders,more and more pledge stocks are faced with the situation of forced liquidation.The unstable investor sentiment will also cause the stock price of the company to fall further,thus forming a vicious circle.In order to further understand the economic consequences brought by the equity pledge of the major shareholders of the pharmaceutical manufacturing industry and propose specific effective measures for reference,this paper selects the major shareholder of Gloria Pharmaceuticals to conduct equity pledge as the research object.This paper analyzes the development process of Gloria Pharmaceuticals,the shareholding structure and financial status,combined with the performance of the major shareholder's equity pledge,and then reasonably speculates on the motives of the equity pledge of the company,and continues to carry out a high proportion of equity pledge to the major shareholder Yu Heng Group and its concerted actions.The economic consequences of listed companies have been specifically studied and analyzed.Through the study of the case,this paper finds that Yu Heng Group,the major shareholder of Gloria Pharmaceuticals,and its actor have been under the control of the actual controllers Zhu Jiman and Bai Lihui.In August 2018,Yu Heng Group has pledged the shares held by 99.96%,Yu Heng International is 99.65% of the shares held by the pledge.Through the analysis of the financial status of Gloria Pharmaceuticals,it is found that the major shareholders may have the motives of direct financing,support for enterprise expansion and short-selling enterprises.After the high shareholding of the major shareholder pledges,the listed company of Gloria Pharmaceuticals also faces many risks: The first one is the risk of transfer of control of the enterprise.This paper analyzes the share of equity of the company that has reached the level of closing to position and finds that the control right of Gloria Pharmaceuticals has the risk of transference;the second risk is the tunneling of enterprise by major shareholders.This paper uses the indicator of tunneling degree to calculate the specific tunneling value through the analysis of major shareholder's account.The third risk is continuing operations.This paper further analyzes the earnings management methods of Gloria Pharmaceuticals,the loss of quality assets and the decline of innovation ability.It is believed that Gloria Pharmaceuticals is facing the risk of continuous operation.The fourth risk is the decline of corporate value.The decrease in the Tobin Q value calculated by two different methods also fully confirms the risk of the decline in corporate value.Finally,in view of the high proportion of equity pledge of Gloria Pharmaceuticals,this paper also puts forward corresponding measures,including the rationalization of the governance structure,the transparency of information disclosure,the control of equity pledge risk and the active seeking of external support.