A Study On The Tunneling Behavior Under The Equity Pledge Of Controlling Shareholders Of *ST JinGui

In recent years,it has been enthusiastically sought after by the controlling shareholders owing to the features of high liquidity of equity pledges and low financing costs.However,the financing through equity pledge by controlling shareholders brings not only benefits but also risks to both sides of the pledge: the controlling shareholder's pledge of the company's equity held by it may lead to control.The transfer of rights;and the pledgee needs to bear the risk of the decline in the price of the pledged equity,and at the same time,it also needs to bear the moral hazard that may be caused by the controlling shareholder's excessive equity pledge.Therefore,it is necessary to combine actual cases to explore the root causes and methods of hollowing out companies after the controlling shareholders of private listed companies pledged a large proportion of equity.This is of far-reaching significance for the further improvement of the relevant equity pledge system.The first section of this article uses the method of literature research to explain the concept of equity pledge,the institutional background,and the basic concepts of controlling shareholder and tunneling behavior of small and medium-sized listed companies.In the second section,the case analysis object of this essay is *ST Jingui Company.This part outlines the basic situation of *ST Jingui Company and the specific situation of the controlling shareholder Cao Yonggui's previous equity pledges;the third part is based on the content of the literature review.In-depth analysis of the frequent and high proportion of equity pledges by controlling shareholders will increase the influence path of the controlling shareholder's motives for hollowing out,and based on the analysis of the above influence paths,a series of funds for the controlling shareholders of *ST Jingui,caused by a large number of equity pledge activities.The method of emptying is described in detail,and the event analysis method is used to reveal the comprehensive impact of Cao Yonggui's repeated large-amount equity pledge behaviors and other emptying behaviors implemented by him on the company's internal and external stakeholders.The fourth part is based on the research content of the previous article,and the following conclusions are obtained from the case of *ST Jingui's controlling shareholder frequently pledging a high proportion of equity after the implementation of the tunneling behavior: First,the method of equity pledge further separates the control rights held by the controlling shareholder from the cash flow rights,and through the pledge of equity,the benefits and risks contained in the equity itself are transferred to the pledgee.When the pledgee bears most of the risk of falling stock prices,this reduces the cost of tunneling for the controlling shareholder and will further stimulate the controlling shareholder to implement the tunneling behavior.Second,the disclosure requirements of the equity pledge information disclosure system are too broad,and there is no need to disclose the flow and use of funds obtained by the controlling shareholder pledged a large proportion of equity,which gives the controlling shareholder a chance to empty the company.Third,the existence of huge loopholes in the company's internal governance mechanism is an important internal factor for controlling shareholders to successfully implement the tunneling behavior.Based on the summarized case conclusions,this article puts forward relevant suggestions,which can effectively restrain the controlling shareholders' frequent large-amount equity pledges.It is of great significance to prevent the hollowing behavior of controlling shareholders and to protect the benefits of small and medium-sized companies and minority shareholders.