The legal service dynamics of Yang Chunbao's lawyer team
Lawyer Yang Chunbao was included in the recommended list of
"Excellent Lawyers & Law Firms Recommended by China's Famous Enterprise Law Firms"
The first "Excellent Lawyers & Law Firms Recommended by China's Famous Corporate Law Firms" recommendation list and 2023 Enterprise Lawyers & Law Firms Guide was released on March 6, 2023. Yang Chunbao, a first-class The lawyer was listed in the "Famous Law Hall - Selected by Clients (excellent lawyers recommended by many well-known corporate law chiefs)".
Law School of East China University of Science and Technology
Renews Employment of Attorney Yang Chunbao as Adjunct Professor
First-class lawyer Yang Chunbao was once again hired as a part-time professor by the Law School of East China University of Science and Technology for a term of three years. Lawyer Yang was last hired in 2019.
Various announcements and reports of the Fund Industry Association
The Asset Management Association of China (hereinafter referred to as the "Association") issued an announcement on March 14, 2023, stating that the Association discovered five suspected lost private equity institutions including Beijing Jinshan Investment Management Co., Ltd. in its daily work. Suspected missing private equity institutions should log in to the AMBERS system to handle the task of verification of missing contacts within 5 working days from the date of the announcement, and provide signature materials through the AMBERS system as required. If it is not completed within the time limit, it will be identified as a "lost contact (abnormal)" private equity institution, and it will be announced on the classified information announcement page of the private equity fund manager, and it will be identified in the "Institutional Integrity Information" column of the private equity fund manager. If a "lost contact (abnormal)" private equity institution has not completed the verification task of missing contact in the AMBERS system for three months, the association will cancel its registration as a private equity fund manager.
The Association announced on March 17, 2023 that 16 private equity fund managers, including Beijing Yiwu Investment Fund Management Co., Ltd., had abnormal operating conditions and failed to submit compliance reports within 3 months after the written notice was issued. According to the special legal opinion, the association will cancel the registration of private equity fund managers of the 16 institutions, and enter the above situation into the securities and futures market integrity archives database.
The Association issued an announcement on March 31, 2023 stating that the existing 8 institutions including Wuhan Jusheng Fund Management Co., Ltd. cannot continue to meet the manager registration requirements. The situation is entered into the integrity file database of the securities and futures market.
1. Regarding the mandatory execution of open redemption obligations, it can be executed in the form of proxy performance. At the same time, when the monetary funds in the fund cannot meet the redemption requirements, and other properties in the fund can be disposed of separately and have a fair market value and an active secondary market, other properties in the fund can be disposed of to obtain monetary funds for redemption.
Typical case of Shanghai Financial Court in 2022: Kong Moumou's application for enforcement of the arbitration dispute of Bagasso (Shanghai) Investment Co., Ltd. [(2021) Hu 74 Zhi No. 654]
Regarding the arbitration case between Kong Moumou, the applicant for enforcement, and Bagasso, the person subject to enforcement, the Shanghai Arbitration Commission ruled that the person subject to enforcement should open the "Bagasso Shenzhou No. 1 Fund" to perform the redemption of the fund shares held by the applicant. obligation. The aforesaid adjudication has taken legal effect, and because the person subject to enforcement, Bagasuo Company, failed to perform its obligations in accordance with the effective adjudication, Kong Moumou, the applicant for enforcement, applied to the Shanghai Financial Court for compulsory execution. The "Bagasso Shenzhou No. 1 Fund" involved in the case is an open-end private equity fund, which is still in its duration. The fund manager is Bagasso Company, the executor, the fund custodian is China Merchants Securities Co., Ltd., and the applicant is Kong Moumou It is a fund share holder who holds 2 million fund shares. At present, the total number of fund shares is 4 million. The net value of fund shares can be retrospectively determined. The fund property is monetary funds and listed company stocks. On the day of inquiry on July 6, 2022, "Bagasso Shenzhou No. 1 Fund" held monetary funds of RMB 23,504.06, and held "Hehui Optoelectronics", "Dezhan Health", etc. For the unrestricted tradable stocks of listed companies, Guosheng Securities Co., Ltd. is the trading broker for the aforementioned stocks.
Implementation modalities
Implementation modalities
The Shanghai Financial Court calculates the number of each stock that needs to be changed according to the ratio of the difference between the redemption funds and the current total market value of the stock, and serves a notice of assistance in execution to the stock trading brokerage Guosheng Securities Co., Ltd. Sell, so that the monetary funds held by the fund reach RMB 1,541,000.00, and pay the aforementioned funds to the special custody fund account of the fund involved. Guosheng Securities Co., Ltd. sold some of the stocks of listed companies such as "Jiangxi Copper Industry", "Dezhan Health", and "Hehui Optoelectronics" held by the fund. Afterwards, the Shanghai Financial Court served a notice of assistance in execution to the fund custodian China Merchants Securities Co., Ltd., informing it to open the fund and redeem the fund shares held by the applicant executor, who will assist in transferring the redemption funds from the special account for fund custody funds Transfer to the fund-raising account of the fund involved in the case, and then pay to Kong Moumou, the applicant for execution, and cancel the fund shares held by the applicant for execution. On August 26, 2022, the fund custodian completed the work of opening the fund involved in the case and redeeming the fund shares held by the applicant executor Kong XX according to the aforementioned requirements, and paid the redemption funds to the applicant executor Kong XX. At this point, enforcement is complete.
2. The practice of back-dating contracts by investors after the event has lost the risk prevention significance of protecting investors from participating in unsuitable investments. If private equity fund managers fail to actively act on whether investors are suitable or not during the fundraising stage, it constitutes inappropriate performance of obligations. Violation of the suitability obligation shall bear the liability for compensation commensurate with its fault and the actual loss of investors in accordance with the relevant provisions of the Contract Law on negligence in contracting.
Ten Typical Cases of Beijing Financial Court in 2022: Dong Moumou v. Beijing Zhongrong Dingxin Investment Management Co., Ltd. Financial Entrusted Financial Management Contract Dispute [(2021) Jing 74 Min Zhong No. 482]
On April 1, 2015, Dong Moumou (investor) signed a fund contract with Beijing Zhongrong Dingxin Investment Management Co., Ltd. Sign on the form, the fund account application and transaction form, and the questionnaire on the risk tolerance of individual fund investors. On the same day, Dong Moumou transferred money to the investment management company. Later, both parties confirmed that the above-mentioned documents were backdated, and they were actually signed on April 15, 2015. On April 3, 2015, the manager involved in the case issued an announcement and notice on the establishment of the fund, informing that the fund had been fully raised, which met the total size of the fund, and was officially established on the same day. Later, because the investment target company was forcibly terminated by the national equity system, the fund involved in the case was unable to sell the shares of the target company through the new third board market, and the remaining remaining shares of the fund had not yet been paid. Dong Moumou then filed a lawsuit in this case, demanding that the investment management company compensate him for the investment principal and loss of income. After the trial, the court of first instance believed that Dong Moumou did not raise any objection before signing the contract after the establishment of the fund, and he did not express his intention to waive the subscription. There was no basis for his request for compensation from the company, so all his claims were dismissed.
After the trial, the Beijing Financial Court held that the investment management company did not perform its suitability obligations in a timely and comprehensive manner in the process of selling fund products. There are certain faults in failing to fully disclose the investment risks before. The obligation of suitability is the embodiment of the obligation of good faith in the field of financial product sales, and it belongs to the category of obligations assigned to the seller's institution before the conclusion of the fund contract. Violation of the suitability obligation shall bear the liability for compensation commensurate with its fault and the actual loss of investors in accordance with the relevant provisions of the Contract Law on negligence in contracting. Considering that the time for supplementary risk assessment and the establishment of the fund in this case is relatively short, the risk tolerance of investors is unlikely to change significantly in a short period of time. The follow-up assessment shows that Dong Moumou meets the qualified investment of the fund products involved in the case. According to the request of the applicant, and the investor subsequently signed the "Fund Contract" and confirmed the subscription, the court held that the violation of the above-mentioned suitability obligation by the investment management company did not substantially affect the investor's ability to subscribe for the fund involved in the case. However, it should still bear certain compensation liabilities to investors for its above-mentioned non-standard behaviors.
3. Limited partners recommended and publicized private equity funds to other investors. Before recommending them, they did not conduct qualified investor identity assessments, risk identification capabilities, and risk tolerance tests. In the case of a fund, it can be determined that there is false publicity and intention to mislead investors to invest, and it is determined that there is a fault, and the investor should be liable for compensation.
Case: Partnership contract dispute between Lu and Jiang [(2023) Lu 02 Min Zhong No. 287]
Lu introduced his company's products to Jiang through WeChat chat since July 2019. In November 2019, Lu sent the following content to Jiang: “[Qingdao Wufeng Gaoxin Investment Center (Limited Partnership)] Scale: 500 million yuan. Project investment period: 12+1 month, annualized rate of return 17 %; Investment type: single equity project. Income distribution: one-time repayment of principal and interest when the product matures. [Product highlights] 1. General partner: Qingdao Yongqiao Industrial Co., Ltd.... 3. Ng Fung Technology Development Co., Ltd. ( Hong Kong) promises to repurchase all equity when it expires....This product is a formally registered equity private equity fund, and the product guarantees the safety of principal and interest..." In December 2019, Jiang transferred 1 million yuan to the online bank of Ng Fung Gaoxin Investment Center , and the purpose of remittance is marked as "acquisition". On the same day, Yongqiao Industrial Company provided Jiang with the "Qingdao Wufeng Gaoxin Investment Center (Limited Partnership) Entry Agreement", which stipulated that the duration of the partnership affairs would be 12+1 months, and the income of the limited partners would be settled after 12+1 months and would be limited. The partner's share and income will be returned to the limited partner's account. Lu is also one of the limited partners of the partnership. On the same day, Lu issued a letter of guarantee to Jiang, which stated that the principal and interest of this product will be paid in one lump sum when it is due, and it is a product with guaranteed principal and interest. If any risks and losses occur during the investment period, Lu will bear all risks and losses. After the agreed project investment period expired, but Jiang has not received the investment principal and interest, so he filed a lawsuit in the court. The court of first instance ruled that Lv should pay Jiang 1 million yuan and interest. Lu refused to accept and filed an appeal.
The court of second instance held that the focus of the dispute in this case was whether the appellant Lv was a qualified subject of responsibility in this case, and whether Jiang should be compensated for his investment losses. Private equity funds are high-risk investment projects. Lu recommended investing in private equity funds to Jiang. Before recommending, Lu did not evaluate Jiang as a qualified investor, nor did he conduct risk identification and risk tolerance tests on Jiang. There is a fault. However, during the investment process, instead of setting up a private equity fund, a limited partnership was established, which was contrary to Lu's promotion of investing in private equity funds. Lv had false propaganda to mislead Jiang about his intention to invest. Therefore, Lu was at fault in the process of recommending, publicizing, and implementing investment to Jiang, and should be liable for compensation to Jiang. Lu's issuance of the "Letter of Guarantee" to Jiang was a unilateral legal act in which Lu promised to compensate Jiang for his investment losses. When there is a loss in Jiang's investment, Lv should be liable for compensation. Jiang's investment has incurred actual losses. Therefore, it is not inappropriate for Jiang to demand that Lv be liable for compensation according to the content promised in the "Letter of Guarantee".
4.The redemption of the fund is linked to market risks and has foreseeable uncertainties, and the principle of "buyer is responsible" should be followed. In the event that the private equity fund involved in the case cannot be paid, the investor has no right to require the relevant individual to assume the responsibility for the payment based on the letter of commitment issued by the employee of the fund sales agency.
Case: Contract dispute between Zhuang and Zhou [(2022) Zhe 02 Min Zhong No. 5418]
Introduced by Zhou, Mr. Zhuang purchased the "Hengjiu Wealth No. 10 Private Equity Fund" of RMB 5 million and the "Hengjiu Wealth Huiying No. 1 Private Investment Fund" of RMB 1.5 million from Beijing Hengjiu Fortune Investment Management Co., Ltd. in January 2018. ", in April 2018, purchased 1.6 million yuan of "Taihe No. 9 Private Equity Investment Fund" from Shenzhen Xinhuiyuan Investment Management Co., Ltd., with an investment period of 1 year. Later, the fund products failed to be paid when they expired, and Zhuang repeatedly demanded but failed. In May 2019, Mr. Zhuang went to the fund sales place to ask for payment again. Zhou, as an employee of the fund agency agency, asked the company leader to confirm the time when the payment could be made, and issued a "letter of commitment" to Mr. Zhuang, stating: "I promise Zhuang invested in Huiying No. 1 (1.5 million yuan) before May 29, 2019; Hengxin No. 10 (5 million yuan) before June 14, 2019; Taihe No. 9 (1.6 million yuan) in 2019 Advance the principal before June 30. Try to advance as much as possible.” The “Letter of Commitment” has signatures of “Zhou” and “Lei”. The Huiying No. 1 (1.5 million yuan) stated in the later "commitment letter" was paid by the fund company, while Hengxin No. 10 (5 million yuan) and Taihe No. 9 (1.6 million yuan) have not been honored. Zhuang Mou sued and asked Zhou Mou and Lei Mou to pay Zhuang Mou's unpaid 6.6 million yuan and overdue payment interest. The court of first instance rejected its claim, and Zhuang refused to accept it and filed an appeal.
Zhuang, as a subject with full capacity for civil conduct with certain experience in fund investment, should clearly understand that fund investment is different from fixed deposits, that risks exist objectively, and that it may not necessarily guarantee capital or even profit; The statement in the contract that "the private equity fund manager does not guarantee that the fund will make a certain profit, nor does it guarantee that investors will not lose their investment principal or obtain a minimum return" are sufficient to show that fund investment is a business behavior that bears its own risks. Linked to market risks, there are foreseeable uncertainties, and the principle of "buyer emptor" should be followed. When the funds involved in the case could not be paid on time, Zhuang requested that the company's payment responsibility be transferred to individuals. This practice itself is inconsistent with the risk concept and operating rules of fund investment. In addition, according to the fact that the "Huiying No. 1" contained in the letter of commitment involved in the case has been paid, combined with the statements of both parties on the formation process of the letter of commitment involved in the case, even if the letter of commitment is true, it is not enough to prove that Zhou and Lei have made The meaning of the addition of the debt is expressed.
Senior Partner of Dentons (Shanghai) Law Firm
E-Mail：
chambers.yang@dentons.cn
The leader of the private equity and investment fund professional group and the TMT industry group leader of Beijing Dentons (Shanghai) Law Firm, the deputy director of the Dentons China Technology, Culture, Leisure and Entertainment Professional Committee, and a member of the Shanghai foreign-related legal talent pool. Bachelor of Laws from Fudan University (1992), Master of Laws from University of Technology Sydney (2001), Master of Laws from East China University of Political Science and Law (2001).
Lawyer Yang has been practicing for 28 years and has long been engaged in legal services for private equity funds, investment and financing, and mergers and acquisitions, covering TMT, big finance, big health, real estate and infrastructure, exhibition industry, manufacturing and other industries. Since 2004, he has been specially recommended or commented by The Legal 500 and Asia Law Profiles for many times. Since 2016, he has been continuously selected as one of the "100 outstanding lawyers in China" by the internationally renowned legal media China Business Law Journal, and won the "Leaders in Law - 2021 Global Awards" China Annual Company Law Expert" title; listed in the first "Excellent Lawyers & Law Firms Recommended by China's Famous Enterprise Law Firms" recommendation list; won several awards such as "China TMT Lawyer Award" and "China M&A Lawyer Award" by Lawyer Monthly and Finance Monthly . He is qualified as an independent director of a listed company. He is a part-time professor of the Law School of East China University of Science and Technology, a part-time tutor of the Law School of Fudan University, a part-time postgraduate tutor of East China University of Political Science and Law, a lecturer of the private equity president class of Shanghai Jiaotong University, and a lecturer of the transnational management talent training class of the Shanghai Municipal Commission of Commerce. Published 16 monographs including "Practical Operations and Case Analysis of Enterprise Legal Risk Prevention and Control", "Winning Capital 2: Complete Operation Guide for the Company's Investment and Financing Model Process", "Practice of Risk Prevention and Control of Private Equity Investment Funds". Lawyer Yang's practice areas are: companies, investment mergers and acquisitions and private equity funds, capital markets, TMT, real estate and construction projects, as well as dispute resolution in the above fields.
Senior Partner of Dentons (Shanghai) Law Firm
E-Mail：
sun.zhen@dentons.cn
Before practicing law, Mr. Sun served as the global, Asia-Pacific or China region president or executive assistant to the vice president in Fortune 500 companies such as Watts, Ingersoll Rand and Alcatel-Lucent. Excellent bilingual communication and coordination skills in Chinese and English. Lawyer Sun published "Private Equity Investment Fund Risk Prevention and Control Operation Practice" and published dozens of articles in the fields of mergers and acquisitions, funds, and e-commerce. Lawyer Sun specializes in private equity investment, corporate mergers and acquisitions, e-commerce and labor legal affairs.
Dentons (Shanghai) Law Firm Intern
Student at Fudan University Law School
Presiding lawyer: Yang Chunbao, first-class lawyer
Phone/WeChat: 1390 182 6830
Business contact and submission email:
chambers.yang@dentons.cn
Address: Floor 9/24/25, Shanghai World Financial Center, 100 Century Avenue, Shanghai
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