Kou Mouyan and Guo Moulong v. Ji Mouqin and Henan Education Technology Co., Ltd.
The court found that the defendant borrowed in the company's name without shareholder approval, established a same-business company at the original premises, and used an affiliate-linked transaction to dispose of the original company's fixed assets at a clearly undervalued price. The court therefore upheld the derivative claim to the extent proved and ordered compensation of RMB 35,000 to the company, while rejecting loss claims that lacked proof of amount or causation.
Holding
The court found that the defendant borrowed in the company's name without shareholder approval, established a same-business company at the original premises, and used an affiliate-linked transaction to dispose of the original company's fixed assets at a clearly undervalued price. The court therefore upheld the derivative claim to the extent proved and ordered compensation of RMB 35,000 to the company, while rejecting loss claims that lacked proof of amount or causation.