Dacheng Law Firm Successfully Represents A Listed Company in Dispute Over Confirmation of Shareholder's Qualification

Recently, three defendants, including a listed company, its shareholding platform and shareholder xx, represented by Dacheng senior partner Guo Hongqing and lawyer Guo Xiaolu, have won the case against Yang X, the plaintiff, for the confirmation of shareholder's qualification. The plaintiff has won the case at both the first and second instance, and all claims of the plaintiff were rejected by the court.

Yang X was the former vice general manager and secretary to the board of directors of the listed company. In order to ensure Yang X's efforts in promoting the listing of the company, as a shareholder of the shareholding platform, Yang X entered into an Equity Transfer Agreement with Yang X, undertaking to transfer 100,000 shares of the listed company indirectly held by her to Yang X as "the price for assisting the listing progress of the company". However, during the listing progress of the company, Yang X left the company. Six years after the successful listing of the company, Yang X filed a lawsuit against the three defendants in accordance with the Agreement on Equity Transfer, claiming to confirm his ownership of 100,000 shares of the listed company and the payment of the equity price of nearly CNY90 million and claiming that losses of interest due to delayed payment of equity price and cash proceeds distributed over the years totaled nearly CNY100 million.

The subject matter of the case was huge and had a great impact on the listed company. As it was a long time ago, some materials were incomplete and the terms of the contract were not clearly agreed, the parties had great divergence on the understanding of the terms of the contract. After being represented by Guo Hongqing and Guo Xiaolu, lawyers, they conducted in-depth investigation into the background of the case, carefully collected evidence which could reproduce the true intention of the parties and the objective facts of the case, proposed defense strategies and countermeasures from substantive and procedural aspects such as "whether the conditions for equity transfer have been met", "the reasons for Yang's resignation" and "whether the limitation of action has lapsed", and formulated a comprehensive and detailed litigation plan.

During the first instance and the second instance of this Case, the two lawyers fully responded, presented evidence and made cross-examination on the above defense thinking and had heated debate with the plaintiff's agents in the first instance and the second instance. Finally, the two lawyers obtained full victory of the case and avoided the economic losses of nearly RMB100 million for the Client.

Such disputes are often encountered after implementing incentives to key employees in the process of rapid growth, and most of them are related to simple incentive plans, vague incentive conditions and problems in the implementation of the incentives. Together with the team, Guo Hongqing and Guo Xiaolu will continue to work in the area of corporate and M&A and restructuring, providing clients with legal services in the areas of corporate governance, M&A and restructuring, equity structure and compliance system construction while resolving complex and complicated disputes.