Shenyang Hongshida Electronics Co., Ltd. v. Zhang Chen and Li Zhengfan

A typical case published by the SPC Second Circuit held that where a company's chairman and supervisor use controlled affiliates to produce and sell products that should have been operated by the company and capture the profits, they harm the company through related-party control and abuse of office and must compensate the company. External parties that are not the company's controlling shareholders, actual controllers, directors, supervisors, or senior managers do not automatically bear joint and several liability under company law when their liability rests on a different legal basis such as unfair competition.