Legal analysis: In violation of the provisions of the Civil Code prohibiting liquidity, the equity transfer agreement is invalid. Under the loan agreement, the creditor and the shareholder sign an equity transfer agreement, stipulating that when the shareholder fails to repay the loan as promised, the equity pledged by the shareholder can be transferred at a fixed price agreed in advance to pay off his debts. Because the equity transfer agreement is based on the financing loan agreement, the pledgee has the right to unilaterally dispose of the pledge in a fixed way when the debtor can't pay off the due debt, and it is not reached through voluntary negotiation after the debt expires. Therefore, in essence, although the transferee is clear when the repayment cannot be made on time, the method and price of the transferee are agreed in advance, and the equity transfer agreement is invalid.
Legal basis: Article 428 of the Civil Code of People's Republic of China (PRC). The pledgee and the pledgor agreed that if the debtor fails to perform the due debts before the expiration of the debt performance period, if the pledged property belongs to the creditor, he can only get priority compensation for the pledged property according to law.