Research On Motivation And Economic Consequences Of Controlling Shareholder's Equity Pledge Financing Of Geo-Jade Petroleum Co.Ltd

In China's capital market,many enterprises,especially private enterprises,have been plagued by financing difficulties.Therefore,since the development of equity pledge,it has been favored by private listed companies.In particular,with the opening of the pledge in the market,the equity pledge market has experienced explosive growth.As a means of financing,equity pledge has indeed brought good news to many private listed companies,but at the same time,due to the increasingly high frequency and high proportion of pledge of shares of major shareholders and even controlling shareholders of listed companies,the market risk case of equity pledge It also happened frequently,which sounded the alarm for the market.Different pledge motives and pledge behaviors will lead to different economic consequences.Therefore,in the context of the frequent risk of equity pledge market,it is particularly important to analyze the economic consequences of equity pledge from the motive of controlling shareholders' equity pledge.Based on the previous literature and theoretical research,this paper analyzes the equity pledge behavior of the controlling shareholder of the private oil and gas listed company,the private oil and gas listed company,by case analysis.Firstly,from the motive of pledge,through analyzing the possible capital flow after the controlling shareholder pledges the equity,the author analyzes the motives of the equity pledge behavior of the controlling shareholders of Intercontinental Oil and Gas,and finds that it has four motivation:the ability to meet investment demand,maintain control,reduce risk,and encroach on interest.On this basis,the analysis of the economic consequences of its pledge behavior is mainly analyzed from three aspects:short-term market reaction,financial status and impact on corporate governance.The study found that the equity pledge behavior of the controlling shareholders of Intercontinental Oil and Gas is short-term,during the period,financial performance and future possibilities have a negative impact on intercontinental oil and gas.Therefore,in the end,this paper puts forward four suggestions on how to avoid risks,improve the value of enterprises and protect the interests of small and medium shareholders:1.Further improve the internal control system;2.Control the frequency and proportion of controlling shareholders' equity pledge;3.Expand the scope of information disclosure;4.Strengthen supervision and increase the cost of violations.