Is supplementary pledge good or bad?

Legal Analysis: Is Supplementary Pledge Good or Bad? Equity pledge is a financing method often used by listed companies, especially when the capital link is not good and the accounts receivable of enterprises are not good, the major shareholders are more inclined to choose this financing method. If it is not returned at maturity, this part of the shares will be sold to banks or trusts. It is equal to the indirect reduction and realization of major shareholders in disguise. If the stock price pledged by the major shareholder of a listed company falls sharply, the pledger will be asked to provide additional guarantee. If the pledged major shareholder has no other collateral to supplement it, it will face the situation of losing control.

Legal basis: Article 440th of the Civil Code of People's Republic of China (PRC). The following rights that the debtor or a third party has the right to dispose of may be pledged: (1) bills of exchange, promissory notes and checks; (2) Bonds and certificates of deposit. (3) Warehouse receipts and bills of lading; (4) Transferable fund shares and equity; (5) Transferable intellectual property rights such as the exclusive right to use a registered trademark, patent right and copyright; (6) Existing and future accounts receivable; (7) Other property rights that can be pledged according to laws and administrative regulations.

Article 446th of the Civil Code The pledge of rights shall be governed by the relevant provisions of the first section of this chapter in addition to the provisions of this section.