Shanghai No. 1 Intermediate Case: Xia Feng inspection boundaries

Reference Case: Xia Feng v. Jiushe Company

The court held that because the company and other actual shareholders had acknowledged the claimant's beneficial shareholder status, inspection rights could be exercised. After a proper written demand and absent any improper purpose, the shareholder could inspect the charter, shareholder records, financial reports, and accounting books, but not ordinarily copy the books; inspection of accounting vouchers required a further showing that the books appeared unreliable or that voucher access was reasonably necessary.

Holding

The court held that because the company and other actual shareholders had acknowledged the claimant's beneficial shareholder status, inspection rights could be exercised. After a proper written demand and absent any improper purpose, the shareholder could inspect the charter, shareholder records, financial reports, and accounting books, but not ordinarily copy the books; inspection of accounting vouchers required a further showing that the books appeared unreliable or that voucher access was reasonably necessary.

Issues

inspection rights of an acknowledged beneficial shareholderdistinction between accounting books and voucherslimits on copying books