Research On Equity Pledge And Change Of Control Rights From The Perspective Of Mixed Ownership Reform

Equity pledge as a low cost,high efficiency,short time,pledging funds for a wide range of financing advantages,has become the preferred financing methods of private enterprises in China.According to statistics,by the end of 2019,the pledge scale of China's A-share listed companies reached 579 billion shares,and China's equity pledge market as A whole showed A steady rising trend.In 2018,the A-share market fluctuated frequently and the stock market continuously fell below the integer mark.Many enterprises were hit by the failure of restructuring,the collapse of share price and the explosion of equity pledge.In order to avoid delisting and solve the pledge crisis,more than 40 private listed companies introduced state-owned equity,and more than 20 of them even transferred the control to the state capital.Most of the existing literature on equity pledge focuses on the motivation and economic consequences of equity pledge.Based on the mixed ownership reform in China,this paper focuses on the relationship between equity pledge and change of control,and combined with the historical background,studies the influence of the introduction of state-owned assets in the face of pledge crisis of private listed companies,and considers the effect of the introduction of state-owned assets on the resolution of pledge crisis.This paper takes Jin Yiwen as the research object to study the mechanism of the change of control rights caused by equity pledge.The main conclusions are as follows:First,equity pledge is motivated by financing and "hollowing out".Large shareholders can expand financing channels through equity pledge.The equity pledge of the major shareholder increases the separation between the ultimate controller's right of control and the cash flow right,and increases the suspicion that the major shareholder embezzles the minority shareholders' rights and interests for his own personal gains.The frequent related transactions of enterprises may involve the transfer of internal interests,both of which indicate that the equity pledge of major shareholders is motivated by "emptying".Second,the mutual demand of private enterprises and state-owned enterprises under the pledge crisis is the mechanism of change of control rights.Private enterprises' reasonable and standardized operation and capital demand for state-owned enterprises under the equity pledge of large shareholders are a great boost for the transfer of control rights of state-owned enterprises.In order to relieve the difficulties of private enterprises,stabilize the capital market and strategic investment,the state-owned enterprises enter the private enterprises,and choose the favorable time when the enterprises are in the pledge crisis,which indirectly promotes the change of the control right of private enterprises.At the same time,the supervision of private enterprises' equity pledge and the loose disposal of the pledgee condone the emergence of the pledge crisis and the change of control right.Third,the introduction of state-owned assets to resolve the equity crisis is doubtful.In the face of the pledge crisis,private enterprises introduce state capital to obtain financial support,broaden financing channels,introduce normative management,and timely relieve the liquidity pressure.However,the introduction of state-owned assets also has cross-industry risks,and the quality and profitability of enterprises have not been fundamentally improved.The sequela of bad operation in the early stage and excessive debt will increase the pressure of resolving the pledge crisis,so the introduction of state capital has no obvious effect on resolving the equity crisis of private enterprises.Fourth,the pledge crisis should focus on prevention.Due to the uncertainty in the resolution of equity pledge crisis caused by the change of control right and the introduction of state-owned assets,at present,more attention should be paid to the prevention of the pledge crisis in the early stage,so as to avoid the irreparable consequences caused by excessive equity pledge of major shareholders and forced transfer of control.The innovation of this paper is to study the mechanism of equity pledge leading to change of control rights from the perspective of mixed ownership reform,and to supplement the literature on economic consequences of equity pledge.It innovatively puts forward that the demand for compliance operation and financial resources of state-owned enterprises under the crisis of pledge by major shareholders is the reason for the change of control rights,and takes the timing motive of state-owned assets entering private enterprises as the condition for the change of control rights,which laterally enriched the path of mixed-ownership reform and provides reference for the mixed-ownership reform of state-owned assets in some regions.Study on the economic consequences of the introduction of state-owned assets by private enterprises and expand relevant literature research.