Research On The Impact Of Controlling Shareholder’s Equity Pledge On Financial Risk

In recent years,the financing channel of equity pledge has gradually become the main way for controlling shareholders to raise funds because of its low threshold and convenience.Especially since 2018,the number of equity pledges has doubled,and the proportion of companies with equity pledges has reached as high as 97%,almost reac hing the point of "no shares,no pledges.However,equity pledge appeared relatively late in our country.Irregularities in the equity-pledged securities market and imperfections in relevant laws and regulations make equity pledges face huge risks.In the existing data,there are few studies that pay attention to the impact of controlling shareholders’ equity pledge on the business activities and business environment of listed companies,and few studies link the controlling shareholders’ equity pledge with the financial risk of listed mpanies.The size of the company’s financial risk directly determines whether the com pany can continue to operate.Therefore,it is necessary to study the impact of control ling shareholders on the company’s financial risk.This paper takes ~*ST Xinguang as a case study object,basically based on the theory of private control interests,the main theory of the agent,and the theory of information inequality..using case study method,literature analysis method and quantitative analysis method,and finds that the controlling shareholder Xinguang Group and Yu Yunxin couple are the most important Equity pledge is implemented for the purpose of solving debt crisis,encroaching on the interests of listed companies,solving financing problems,and maintaining the control of controlling shareholders.Combined with financial indicators,this paper analyzes the financial risks of ~*ST Xinguang after the equity pledge from five perspectives:investment risk,financing risk,liquidity risk,inventory management risk and income distribution risk.Finally,the-score evaluation model is used to analyze the bankruptcy of ~*ST Xinguang after the equity pledge.The possibility of the controlling shareholder’s frequent equity pledge will increase the financial risk of the listed company.This paper puts forward suggestions for establishing a sound financial early warning system,paying attention to the factors related to financial risks,regulating the behavior of equity pledge and improving the supervision system,so as to prevent and alleviate the possible financial risks caused by the controlling shareholder’s equity pledge.