Research On The Impact Of Equity Pledges By The Controlling Shareholder Of Macrolink On Corporate Financial Risks

Against the backdrop of financial deleveraging,real estate companies are under increasing pressure to raise capital as policies such as the "three red lines" for real estate companies and the "two red lines" for banks are being increased.Therefore,in recent years,the convenient financing method of equity pledging has been used by more shareholders of real estate enterprises to ease the financing constraints.However,due to the lack of maturity of China’s capital market development and the lack of perfection of relevant laws and regulations,equity pledges have brought about a series of problems,especially the controlling shareholder’s equity pledges have hidden large risks behind the act.After the equity pledge,the controlling shareholder’s investment preference changes and the degree of separation between cash flow rights and control rights increases,so the controlling shareholder is prone to use its control rights in the enterprise to make unreasonable behavioral decisions,which in turn negatively affects the operation of the enterprise and brings financial risks to the enterprise.In the current study,fewer scholars directly study the impact of controlling shareholders’ equity pledge on corporate financial risk,therefore,it is meaningful for this paper to explore the research on the impact of controlling shareholders’ equity pledge on corporate financial risk.This paper takes Macrolink as the research object,based on domestic and foreign research bases,and uses literature research method and quantitative research method to compile and analyze the information data related to Macrolink’s controlling shareholder’s equity pledge,and on this basis,explores the ways in which Macrolink’s controlling shareholder’s equity pledge affects corporate financial risk and its specific performance.Firstly,we analyze the general situation and motivation of equity pledges of controlling shareholders of Macrolink,and then discuss the paths through which equity pledges of controlling shareholders affect corporate financial risks,and find that equity pledges of controlling shareholders mainly affect financial risks through three paths: over-investment,encroachment of interests of controlling shareholders and risk of transfer of control.Immediately afterwards,the financial risks in the three areas of financing,investment and liquidity were identified through the analysis of specific financial data of Macrolink,and the financial risks after the controlling shareholder’s equity pledge were comprehensively evaluated using factor analysis,and it was found that the controlling shareholder’s equity pledge would make the level of Macrolink’s financial risks rise continuously through various ways.Finally,this paper proposes countermeasures in terms of external supervision and internal governance to address the impact of controlling shareholder’s equity pledge on the financial risk of Macrolink.