Database Case: Company A v. Gao Moumou and Cheng Mou

The Company Law does not prohibit related-party transactions as such, but directors and senior managers owe duties of loyalty, diligence, and disclosure. Whether a related-party transaction harmed the company requires substantive review of the transaction structure, commercial necessity, and price fairness; profits siphoned through unnecessary intermediary arrangements may be treated as company loss recoverable from the responsible persons.