In 2016, Guo Qing and Xiang Sujing, partners at King&Capital,accepted an engagement from a foreign client.They acted as counsel for the victim in proceedings following a police complaint over criminal embezzlement by senior company management.
An overseas Chinese born in 1927 in Tianjin,the client settled in the United States after leaving China in the 1930s. In entrusting the case to lawyers at King&Capital,he alleged the following:he established a wholly foreign-owned enterprise upon returning to Tianjin in 2001.Given that he was over 70 years old at the time,lived permanently in the US and had a limited command of Chinese,he handed over the reins to general manager Wang,in whom he placed great trust.He would come to China once or twice a year to sign,in his capacity as shareholder,financial bills and company documents at Wang’s behest.He even left several pieces of signed blank A4 paper for Wang.In March 2015,he suddenly received a remittance of hundreds of thousands of US dollars from Wang,who advised that this was consideration for the shares that had already been 100%transferred into Wang’s name.Despite his advanced age,the client immediately applied for a visa,bought plane tickets and flew to Tianjin,where he engaged a local lawyer to inquire the relevant industry and commerce administration information.Armed with preliminary evidence,he then filed a complaint with police.
The criminal investigation was not without its hurdles.Owing to many reasons,the client turned to lawyers Guo Qing and Xing Sujing for handling the case in 2016,assisted by lawyer Sun Xun from the foreign affairs department.Upon reviewing the case file,verifying the case facts with the client,analyzing all English email exchanges between the client and suspect over the past two years,and repeatedly communicating with the case officer and prosecutor,King&Capital lawyers issued their legal opinion.
In order to shed light on the case,the several legal documents used to change the company shareholding ownership underwent multiple rounds of forensic examination.Nevertheless,the examinations offered no concrete conclusion on key pieces of evidence regarding crucial points such as whether the signatures were the client’s own,whether the signatures predated or succeeded the documents being printed,whether the body of the document is printed together with the signature page and whether there was a reasonable explanation for the client’s absence from China during the date of signature.Since reasonable doubt could not be fully excluded even after twice remitting the case for supplementary investigation,the procuratorate made a decision not to prosecute due to insufficient evidence.At the client’s insistence,King&Capital lawyers petitioned for review twice,respectively to the First Division of the Tianjin Municipal People’s Procuratorate and the Tianjin Municipal People’s Procuratorate.They voiced petitioner’s opinions at a public hearing,and participated in an in-depth examination of the difficulties of the case with attending NPC representatives,prosecutor representatives,law school representatives and lawyer representatives.
In handling the criminal case and by carefully pouring over the audit report provided by a professional,police-designated institution,King&Capital lawyers discovered that the client’s dividends had been unprotected for many years.The senior management implicated could also have harmed company interests through a breach of fiduciary duty.The client was subsequently advised to file a separate civil complaint.The Tianjin No.2 Intermediate People’s Court accepted the dispute over a shareholder’s right to know and allocation of company profits,and handed down its first-instance judgment.For the profit allocation case,the Tianjin High People’s Court recently rendered a final judgment upholding the original decision,supporting our claim to payment of tens of millions in outstanding dividends.Wang was found jointly and severally liable.The other case is still pending before the Tianjin High People’s Court.
The case is a classic example of hybrid criminal/civil litigation with a foreign element.By proceeding through criminal investigation,review and prosecution,criminal petitioning,forensic examination,third-party auditing,civil litigation,and the issuance of investigation orders authorizing evidence-collection by the lawyer,it exacted a high standard from lawyers in their ability to comprehensively handle the case and communicate with foreign clients.
Lawyers Guo Qing, Xiang Sujing and Sun Xun are experienced in handling hybrid criminal/civil issues as well as acting in cases with a foreign element.They are apt to provide clients with legal advice through many channels and from many perspectives in order to help them achieve their ultimate objective.