(1) induces the operational risk of listed companies. External guarantee is the normal business behavior of listed companies. However, violating the laws and regulations and the Articles of Association and deviating from the normal decision-making procedure of external guarantee approval not only reduces the risk control ability of listed companies, but also lays a hidden danger for the company's future production and operation. Once the creditor asks to pay off the debt, the normal production and operation plan of the company will be disrupted, and the assets and cash flow will be stretched.
(2) Destroy the corporate governance structure. The essence of illegal guarantee is that major shareholders and controlling shareholders abuse shareholders' rights, ignore the publicity of listed companies, use listed companies as private tools for their own operation, borrow money, undermine the independent status of listed companies and damage the corporate governance structure.
(3) It is detrimental to the credibility of information disclosure in the capital market. The illegal guarantee of listed companies will inevitably lead to false statements and other illegal acts in the company's information disclosure documents, which will infringe on investors' right to know.
(4) Seriously infringing on the rights and interests of small and medium-sized investors. Illegal guarantee not only infringes on investors' right to know, but also brings about stock price fluctuation in the secondary market. In the face of sudden corporate risk events, small and medium-sized investors are forced to pay for the illegal acts of major shareholders and controlling shareholders, resulting in damage to their legitimate rights and interests.