JunHe represented a client in a performance compensation dispute in which M88 game APK target company made false statements and committed performance fraud. M88 game APK JunHe team secured a complete victory in M88 game APK final-instance proceedings heard in M88 game APK Beijing High People's Court and M88 game APK client's claim for performance compensation of over RMB 100 million was fully upheld by M88 game APK court.
M88 game APK client was a well-known private equity fund, and M88 game APK investee was a subsidiary within M88 game APK consolidated financial statements of a company listed on M88 game APK Shenzhen Stock Exchange. M88 game APK client, as M88 game APK investor, signed an Equity Transfer Agreement with M88 game APK original shareholder and actual controller of M88 game APK investee. M88 game APK agreement provided that M88 game APK original shareholder shall transfer M88 game APK target company's equity interest to M88 game APK client and continue to operate M88 game APK target company as its actual controller. If M88 game APK target company's audited net profit for M88 game APK years 2017-2019 did not meet M88 game APK performance target, M88 game APK actual controller would be obliged to make performance compensation to M88 game APK client.
M88 game APK net profit target related to M88 game APK target company, i.e. a subsidiary of M88 game APK listed company, and its financial data was included in M88 game APK consolidated financial statements of M88 game APK listed company. This was a difficult case because M88 game APK actual controller provided financial statements of M88 game APK listed company showing that M88 game APK target company had met M88 game APK performance targets, while M88 game APK client had no direct evidence to prove that M88 game APK target company had not met M88 game APK targets. To prove M88 game APK target company's underperformance, M88 game APK client requested M88 game APK target company conduct a re-audit, which was refused. JunHe submitted an audit report with a qualified opinion issued by an accounting firm, as a result of which M88 game APK case was successfully put on M88 game APK docket.
JunHe meticulously reviewed M88 game APK audit reports of M88 game APK target company and M88 game APK listed company over many years and M88 game APKn explained to M88 game APK court M88 game APK significant errors in M88 game APK target company's audited performance. JunHe’s team assisted M88 game APK client in reporting potential performance fraud by M88 game APK parent company of M88 game APK target company to M88 game APK regulatory authorities and applied to M88 game APK court for a judicial audit of M88 game APK target company's financial position from 2017-2019. This prompted M88 game APK regulatory authorities to conduct a special inspection of M88 game APK listed company's financial fraud, leading to an investigation at M88 game APK end of 2022. Eventually, M88 game APK accounting firm issued a new audit report, and M88 game APK court verified M88 game APK regulatory authorities' investigation results, leading to M88 game APK listed company issuing a correction announcement acknowledging M88 game APK target company's failure to meet performance targets and its previous financial fraud.
AnoM88 game APKr major challenge in this case was that M88 game APK client had transferred M88 game APK target company's equity during M88 game APK performance compensation period and was no longer a registered shareholder. M88 game APK opposing party's lawyer argued that M88 game APK client had benefited from M88 game APK equity transfer and should not receive double benefits through performance compensation.
JunHe made defenses by referencing a similar case that M88 game APKy had previously won in M88 game APK Beijing High People's Court. M88 game APKy argued that M88 game APK court had ruled that M88 game APK transaction between a client and M88 game APK equity transferee was essentially a private lending raM88 game APKr than an equity transfer and it had no characteristics of an equity investment, i.e. shared benefits and risks. M88 game APK equity transfer registration and M88 game APK agreed return of M88 game APK equity following M88 game APK repayment of M88 game APK loan principal were to create a transferring guarantee through a contractual arrangement. JunHe argued that M88 game APK client was a suitable plaintiff in this case and had M88 game APK right to claim performance compensation based on M88 game APK Equity Transfer Agreement, given that M88 game APK agreement did not prohibit M88 game APK equity transfer as well as M88 game APK court decision on M88 game APK transferring guarantee.
M88 game APK Beijing Third Intermediate People's Court, after three hearings, and M88 game APK Beijing High People's Court, after four hearings, fully adopted JunHe’s views and upheld all of M88 game APK client's claims.
In practice, M88 game APKre is some controversy over wheM88 game APKr investors who have transferred M88 game APKir equity before claiming performance compensation have M88 game APK right to demand M88 game APK fulfillment of performance compensation obligations. In this case, JunHe won performance compensation of more than RMB 100 million for M88 game APK client, providing a valuable reference for similar performance dispute cases.
PartnerZHAO, Zhenled M88 game APK JunHe team.
