A Dispute and Settlement involving Technology Investments

Comments on a Shareholder’s Qualification Case Arising out of Technology Investments

(Steven Wang) Recently, the author has represented parties in a shareholder’s lawsuit, with the dispute centering on IPR investment. The court has already heard the case. The property value involved in the lawsuit totaled as high as RMB 300 million Yuan, and the laws applied in its hearing involved IPR law, contract law, and corporate law. The focus of the dispute referred to the patent, exclusive technology, contribution, revocation of shareholder qualification and the application of law when a number of conflicts arise among these different areas of the law.  These conflicts have caused a lot of discussion regarding these legal conflicts, and several conclusions have been reached regarding issues presented in the case.

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Introduction to the Resolution to the “Two Boards” Issue in China Listed Companies

(By Yu Zhiyuan) Recently, the author was interviewed by the media on the issue of the “two boards” of Jiulongshan, a Chinese listed company. The author would like to analyze the basic legal principles concerned in the “board battle” in this particular case.

I. The ummary of the Issue

Shanghai Jiulongshan Travelling Co. Inc. (hereinafter “Jiulongshan”) is a listed company, and recently, its original biggest shareholder (represented by Mr. Li Qin Fu, chief of the company board) transferred approximately 29.9% of the company’s share options to HNA Property (hereinafter “HNA”). As a result of that transaction, HNA became the biggest shareholder and company registration with the Ministry of Industry and Commerce was amended to reflect those changes. However, HNA has not completed its payments in consideration of the stock transfer. On 21st December 2012, HNA called an impromptu shareholders’ meeting as the company’s biggest shareholder. At the meeting, it passed on the suggestion to recall Mr. Li Qin Fu to act as head of the board of the company, and thereafter voted in new board members. Beijing Kang Da Law Firm filed a brief to affirm the legal effectiveness of the decision and the voting. In reply to Kang Da’s brief, Jiulongshan held its own board meeting on 25th December 2012, at which most board members claimed that HNA lacked the ability to hold its own impromptu shareholders’ meeting. In addition, the board made an announcement, supported by the legal opinions of Shanghai-based Yan Yi Ming Law Firm, that any decisions made by the temporary shareholders at their previous meeting on 21st December 2012 were invalid.

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