Recently, in a case of dispute over the transfer of equity in a bank, which involves nearly RMB 30 million equity and nearly RMB 16 million equity transfer amount, the team led by Jin Shanshan, a partner of Beijing ZhongYin Law Firm, has successfully won the first instance and obtained an effective judgment.

The equity transfer dispute involves issues such as the influence of the approval acts over the transfer of equity in a bank on the effectiveness of the contract, “yin yang contracts”, agency, cancellation, fraud, and apparent unfairness, resulting in the complexity of the case and great difficulty of representation. After accepting the entrustment, Jin Shanshan’s team provided a full range of legal services for this case. She organized her team members to study laws and regulations, judicial interpretations and precedents regarding equity transfer and contract effectiveness, and argued as follows: 1. since the company conducted the transaction when knowing that the counterparty's agent had no corresponding authority or acted as an ultra vires agent, it is not a bona fide party and is in material fault, and thus has no right to cancel the contract; 2. since a fraud is defined as one party’s deliberate provision of false information or concealment of truth situation, causing the other party’s expression of untrue intention, and has nothing to do with whether the other party is aware of relevant laws and regulations, it cannot be determined as a fraud; 3. since in the determination criteria of apparent unfairness, the value of subject matter is agreed upon by the parties based on their true intention, and is not measured at market price and has nothing to do with appreciation, it cannot be determined as apparent unfairness. In summary, the equity transfer contract is valid, and the shareholder we represent has fulfilled its contractual obligations to go through the procedures for equity change, so we petition the court to order the counterparty to pay the equity transfer amount and liquidated damages.

After the discovery of evidence, court sessions, and repeated communications with the judge in details in the first instance, Jin Shanshan's team provided the judge with a wealth of supporting exhibits and precedents. In the end, the court of first instance accepted our arguments, and we won the case –- the court supported our claim for payment of RMB 16 million equity transfer amount.

Team

Jin Shanshan's team has many years of professional experience in practicing in the area of capital markets, covering many sectors such as finance, domestic listing, investment and financing, M&A and reorganization, corporate and commercial legal affairs, litigation and arbitration. By winning this case, we safeguarded the rights and interests of the shareholder(s) of the bank; through our professional legal services, we provided a safer trading environment for the shareholder(s) of the bank to trade equity.