Research On The Motivation And Risk Of Equity Pledge Of Major Shareholders

With the expansion of enterprise scale and the increasing intention of business transformation,equity pledge is increasingly favored by shareholders due to its advantages such as fast financing speed,low threshold,and difficulty in losing control.The development time of China’s capital market is relatively short,and the system is not mature enough.The phenomenon of forced liquidation of pledged stocks and transfer of control rights has repeatedly occurred.In recent years,GCL Energy Technology has reached the estimated warning line for multiple equity pledges,so it is urgent to study the risk of high proportion equity pledges by major shareholders of GCL Energy Technology.Based on a review of relevant literature at home and abroad on the motivation,risk,and risk response of equity pledge,this paper uses the principal-agent theory,separation of control and cash flow rights theory,information asymmetry theory,and tunnel effect theory,combined with the situation,equity structure,and process of equity pledge of GCL Energy Technology Company,and finds that the characteristics of equity pledge of major shareholders of GCL Energy Technology include continuous pledge,frequent pledge High proportion of pledges and unclear information on pledge announcements;Elaborated on the four major motivations for major shareholders to engage in equity pledge based on maintaining control,the needs of company business development,personal financing motives of major shareholders,and obtaining illegitimate private interests;And it uses La Porta separation model,financial index method and event study method to analyze the pledge risk from four aspects: GCL Energy Technology’s control transfer risk,financial risk,stock price fluctuation risk and risk of encroaching on the interests of small and medium-sized shareholders.Research has found that:(1)the initial motivation of major shareholders is goodwill,while the later motivation shifts towards seeking illegitimate private interests.(2)The proportion of shares held by major shareholders is relatively high,and the pledge of shares increases the risk of control transfer.(3)A high proportion of frequent pledges exacerbate the company’s financial risks.(4)Malicious equity motives trigger the risk of stock price fluctuations.(5)Embezzling the interests of small and medium-sized shareholders through fund occupation and frequent large-scale related party guarantees.Propose suggestions to prevent the risk of equity pledge from three perspectives: external regulators,listed companies,and pledgee,in response to the risks arising from GCL Energy Technology.The paper not only analyzes the risk of pledge from the aspects of control transfer risk,financial risk,and stock price fluctuation risk,but also focuses on the issue of encroaching on the interests of small and medium-sized shareholders,expanding the research scope of equity pledge risk,making the research on enterprise pledge risk more comprehensive,enriching the research direction of existing equity pledge,and providing certain reference and warning significance for other companies in the application of equity pledge financing.