Research On Economic Consequences Of Equity Pledge Of BX Company's Controlling Shareholders

Compared with other financing methods,equity pledge has long been easy to realize and relatively simple review procedures,which has made private enterprises choose to enter the capital market in this way,which has eased the financing difficulties of private enterprises.However,equity pledge is a double-edged sword.It also conceals the pledge risk when it alleviates the financing plight of private enterprises.Since the split share structure reform,there have been many cases where the controlling shareholder pledged to use the equity to pledge the interests of small shareholders.Therefore,the reason why the controlling shareholder of the private enterprise successfully used the pledge to dig out the interests of small shareholders and whether the pledge can bring a positive effect on the development of the enterprise are all questions that we should explore.Based on the principal-agent theory,signal transmission theory,and information asymmetry theory,this paper studies the economic consequences of the high-profile equity pledge of the controlling shareholder,and combs the relevant literature of equity pledge,including the concept of equity pledge,the motivation of equity pledge,the risk of equity pledge,and The economic consequences after the pledge,etc.,are the basis for the subsequent analysis of the paper.By studying the current status of equity pledges,this paper selects companies in the communications industry as the focus of this paper.In the case analysis,I chose the typical incident of high proportion pledge of the controlling shareholder of BX company,briefly describing the overview of the case company,the company's shareholding structure and the pledge status of the major shareholders.In the specific analysis stage,regarding the reasons for the successful hollowing out of large shareholders: the separation of the two major powers of the first large shareholder has deepened,making it inconsistent with the interests of small and medium shareholders;the second company 's information disclosure is not standardized and violates the relevant regulations of the GEM;The internal governance of the company is imperfect,and the supervisors have not played an effective supervisory role;the fourth regulatory regulations system is imperfect,and the major shareholders use loopholes in the law for their own profit.The above situation provides convenience for the controlling shareholder to take advantage of minority shareholders.Regarding the economic consequences,it was found that the high proportion of pledges by the controlling shareholder promoted the separation of the two powers between the controlling shareholder and the agency problem between the controlling shareholder and the small and medium shareholder.Turned into a goal,regardless of the interests of small and medium shareholders.According to the theory of signal transmission,the controlling shareholder continuously pledged to pass a negative signal to the market,the company's stock price was greatly fluctuated,and the company's value shrank sharply,thereby harming the interests of small and medium shareholders.Finally,based on the case study,the following recommendations are made: on the one hand,the regulatory authorities should improve the relevant laws on equity pledges,increase the transparency of information disclosure and increase the illegal costs under equity pledges;Internal governance.