Analysis On The Credit Risk Of Listed Companies Under The Pledge Of Controlling Shareholders

As a common financing method,equity pledge has been widely used in China’s listed companies.However,there are also great risks,because once there are problems,not only the pledgor may face the loss of equity,but also the listed company will change the controller.This major change will have a great impact on the company and bring uncertainty to the development of the company.This paper studies the equity pledge of controlling shareholders from the perspective of credit risk.After equity pledge,the controlling shareholders will face the risk of control transfer and increased personal financial leverage,and the controlling shareholders often have an absolute voice over the listed company.At this time,the controlling shareholders may make unreasonable operation and management behaviors through the governance of the listed company in order to avoid the transfer of control and reduce their own financial leverage,For example,conceptual over investment and the use of related party transactions to encroach on the interests of listed companies.In order to study the impact of controlling shareholders’ equity pledge on the credit risk of listed companies,this paper selects Qianshan pharmaceutical machinery as a case company.This paper selects Qianshan pharmaceutical machinery as a case company.Firstly,it explains the basic situation of the controlling shareholder’s equity pledge,and uses KMV model and financial index analysis method to measure the overall credit risk of Qianshan pharmaceutical machinery during the period of the controlling shareholder’s equity pledge;Secondly,according to the theoretical analysis framework,this paper analyzes the path of the impact of controlling shareholders’ equity pledge on the credit risk of listed companies from two aspects: the motivation of stabilizing stock price and the motivation of interest encroachment;Thirdly,it analyzes the consequences of Qianshan pharmaceutical machinery’s credit risk after the controlling shareholder’s equity pledge;Finally,relevant countermeasures are put forward.This paper focuses on the path of controlling shareholders’ equity pledge affecting the credit risk of listed companies.Conclusions: first,Through KMV model and financial index analysis,it is found that the credit risk of Qianshan pharmaceutical machinery shows an upward trend during the period when the controlling shareholders pledge their equity.Second,based on the motivation of stabilizing the stock price,the controlling shareholders will carry out four behaviors: conceptual over investment,aggressive credit sales,real earnings management and accounting information disclosure.Through analysis,this paper finds that although these four behaviors have boosted the stock price of Qianshan pharmaceutical machinery in a short time,they will leave hidden dangers to the company in the future,The above actions will lead to the rise of credit risk of Qianshan pharmaceutical machine.Third,after the pledge of controlling shareholders’ equity,they encroach on the interests of listed companies based on the motivation of interest encroachment.They encroach on the interests of listed companies mainly through related party transactions,illegal related party guarantees and occupation of non operating funds,so as to increase the credit risk of listed companies.Fourth,by analyzing the performance of Qianshan pharmaceutical machinery after the increase of credit risk,we know that the performance of the increase of credit risk of Qianshan pharmaceutical machinery includes: the sharp increase of default events;The bank accounts of the company and its subsidiaries are frozen;The company’s financing is becoming more and more difficult,and the private placement has failed repeatedly.Fifth,combined with the case,this paper proposes to strengthen the external supervision of equity pledge,improve the governance structure of listed companies,and strengthen the information disclosure rules of equity pledge companies as countermeasures to standardize the equity pledge behavior of the controlling shareholders of Qianshan pharmaceutical machinery and prevent credit risks.