Shanghai Zhongkeyinghua Technologies Co., Ltd. and Related-Party Trading Loss Liability with Zhengzhou Investment Holding Co.
The court held that a control-linked related-party structure existed and that unfair procurement transactions caused losses to the target company. The judgment for damages was affirmed on appeal. The case also confirms that where the supervising body refuses to act after being requested, qualifying shareholders may sue directly under statutory standing requirements, including where control-linked actors and executives are involved.
Holding
The court held that a control-linked related-party structure existed and that unfair procurement transactions caused losses to the target company. The judgment for damages was affirmed on appeal. The case also confirms that where the supervising body refuses to act after being requested, qualifying shareholders may sue directly under statutory standing requirements, including where control-linked actors and executives are involved.