Research On The Violation Of Information Disclosure Under The Pledge Of Controlling Shareholders’ Equity

The vigorous development of the Chinese securities market has brought opportunities for many Chinese companies to expand their listing and financing,providing them with diverse financing channels.Equity pledge is currently an important financing method used by listed companies to alleviate their own liquidity gap.However,pledging equity by controlling shareholders to obtain liquidity also brings certain risks.In order to address these risks,company information disclosure violations often occur.In order to ensure the healthy and orderly development of the capital market,it is crucial to strictly investigate and punish information disclosure violations,maintain a fair and just investment market environment,study cases of information disclosure violations under the pledge of controlling shareholders’ equity,understand the company’s motives,and provide feasible measures to prevent information disclosure violations.In this paper,Tibet Huayu Mining Co.,Ltd.,a listed company that was punished by the CSRC for delayed disclosure due to important related party transactions and equity auction of controlling shareholders in 2021,is selected as the main research object,and according to the company’s main business,Jinhui Co.,Ltd.,a listed company that is also engaged in zinc and lead mining,is selected for comparative analysis of its financial situation in the same industry Conduct case studies from multiple perspectives to analyze the impact of controlling shareholder equity pledge on company information disclosure violations.Moreover,this article further studies the causes,opportunities,and responsible parties of information disclosure violations,while providing corresponding preventive measures.This article finds that equity pledge behavior directly affects a company’s information disclosure behavior by influencing its business development status,and at the same time,equity pledge behavior also indirectly affects the information disclosure behavior of controlling shareholders based on the motivation of control incentive.The article further found that when a company experiences a judicial auction of its equity due to a breach of equity pledge,the results of the judicial auction will have a significant impact on the company’s secondary market stock price in a short period of time.When the judicial auction is successful,the company’s stock price will significantly rise in a short period of time.Compared to previous empirical studies,the innovation of this article lies in the use of case studies.Starting from the perspective of studying the specific behaviors of illegal and irregular information disclosure by the case company,it studies the reasons,opportunities,and responsible parties for the occurrence of illegal and irregular information disclosure by the case company,and summarizes corresponding preventive measures.