The Influence Of Share Pledge Of Controlling Shareholders Of Listed Companies On Corporate Value

With the increasing demand for funds from listed companies,equity pledge has gradually become a widely adopted financing method by shareholders.Compared with other financing methods,the approval process for equity pledge is simple and convenient,and it can provide a large amount of cash flow at a small cost.The pledged amount is invested in the normal operation of the company,which can increase the company’s performance and help enhance the company’s value.At the same time,shareholders will not lose control.However,with the continuous expansion of the scale of equity pledge,there are frequent adverse events such as massive related party transactions,high capital occupation,and external guarantees.Controlling shareholders often use equity pledge to satisfy their personal desires,seriously infringing on the overall interests of the company.At the same time,the high proportion and frequent frequency of equity pledges can also cause the market to receive negative information such as fund shortages and deteriorating financial conditions,which is not conducive to the improvement of the value of listed companies.This thesis introduces the background of equity pledge,analyzes and sorts out relevant literature on the motivation of equity pledge behavior,the path of equity pledge affecting company value,and the impact results at home and abroad.At the same time,it defines relevant concepts and explains the relevant theories used in analyzing the case.Selecting Sansheng Industrial as the case study object,the basic information,financial status,and equity structure of Sansheng Industrial were summarized,and the situation of controlling shareholders’ equity pledge of Sansheng Industrial was introduced,including the frequency of controlling shareholders’ equity pledge,the proportion of pledged shares to their holdings,and the purpose of pledged funds.This thesis studies the way in which the pledge of controlling shareholders’ equity affects the company’s value,and analyzes the company’s value based on the traditional financial indicators,event study,Tobin Q value and economic value added.Research has found that frequent and large-scale equity pledges by controlling shareholders can increase the separation of control and cash flow rights,reduce company research and development investment,and exacerbate financing constraints,which have a negative impact on company value.Through the analysis of the case of equity pledge by the controlling shareholder of Sansheng Industrial Group,we can draw inspiration for the company,as well as reference for regulatory authorities,pledgee,and investors,and draw conclusions.The company should improve its internal governance mechanism,reasonably plan financing funds,and ensure transparency in information disclosure.Regulatory authorities should strive to improve the information disclosure system,and pledgee should supervise the company in the early,middle,and later stages of pledge.Investors should treat investment decisions made with caution.