(2021)最高法民申6621号

Reference Case: Shaanxi Investment Company v. Zhang and Zhu (Breach of Corporate Interest)

The court held that Zhang, acting as the company's legal representative and board chair, improperly diverted and disbursed company funds to related parties without following internal-control procedures. Zhu, who served as both supervisor and finance operator, participated in the transfers despite clear warning signs. A supervisor cannot escape liability merely by claiming to have followed instructions; because she had a duty to stop the legal representative's and managers' harmful conduct, she bears joint responsibility together with the legal representative for return and compensation.

Holding

The court held that Zhang, acting as the company's legal representative and board chair, improperly diverted and disbursed company funds to related parties without following internal-control procedures. Zhu, who served as both supervisor and finance operator, participated in the transfers despite clear warning signs. A supervisor cannot escape liability merely by claiming to have followed instructions; because she had a duty to stop the legal representative's and managers' harmful conduct, she bears joint responsibility together with the legal representative for return and compensation.

Issues

legal representative harming corporate assetssupervisor participation in improper transfer of fundsjoint liability of supervisor and legal representative