Research On The "tunneling" Behavior Of Major Shareholders Under Equity Pledge

In recent years,affected by the macroeconomic environment,the development space and profit space of some enterprises have shrunk,leading to many new phenomena that are not conducive to obtaining financing,such as increased financing costs and more difficult financing.In particular,the difficulties of private enterprises in financing are increasingly apparent in China.In order to solve the problem of difficult and expensive financing for private enterprises,various financing methods and channels in the financial market are also increasingly abundant.Due to the good liquidity and rapid realization of equity in the secondary market,equity pledges have become an important way for financing of private enterprises.However,there are many shortcomings in equity pledges,especially high proportion equity pledges,and there are numerous cases of liquidation.Although equity pledge is the personal behavior of major shareholders,equity pledge behavior will have a dual impact on the company’s operations.As China’s laws and regulations on equity pledges need to be improved,under the condition of high proportion of equity pledges,the cost of large shareholders to hollow out the enterprise is relatively low,and it is easy to transfer risks.Under the condition of a high proportion of equity pledges,the incentives for large shareholders to hollow out the company to obtain funds have increased,and the means of hollowing out has also become diversified.This phenomenon has seriously harmed the interests of the company,and it is also the "tunnel excavation" of small and medium shareholders by the large shareholders.Therefore,it is necessary to study the internal relationship and mechanism between the high proportion of equity pledge and the behavior of hollowed out companies in order to prevent the personal behavior of large shareholders from causing damage to enterprises and small and medium shareholders.This article takes Gosun Holding as an example.First,it analyzes Gosun Holding’s development profile,shareholding structure,characteristics of the board of directors,and the actual controller’s equity pledge situation,and uses the event research method to explain the negative effects of equity pledge.It is found that Gosun Holding has excessive equity concentration.Weak shareholding checks and balances have caused major shareholders to have absolute control over the company.A high proportion of equity pledges has led to a severe separation of control and cash flow rights,which has reduced the cost of hollowing out,which has created incentives and conditions for large shareholders to hollow out enterprises.Secondly,by analyzing the dredging behavior of major shareholders and measuring the dredging degree of major shareholders,it was found that the actual controller of the company hollowed out the listed company in various ways.Based on this,the influence mechanism of equity pledge on the hollowing-out behavior is sorted out.Thirdly,using A-share private listed companies as a sample,the empirical analysis of the relationship between the substantial shareholder’s equity pledge and its hollowing behavior,the research shows that private listed companies with equity pledge by the large shareholders are more likely to generate hollowing behavior and the large shareholders The proportion of equity pledge is directly proportional to the degree of hollowing out.Finally,in order to prevent hollowing out under equity pledges,relevant countermeasures and suggestions are proposed from the company level and the regulatory level.