问答题
5.Ms Huang, a shareholder of the Daqing Limited Liability Company (Daqing), found that the general manager, Mr Ding,had accepted bribes from several suppliers, which materially caused losses to Daqing, and adversely affected theinterests of all shareholders.
Further examination, through a Certified Public Accountant firm, disclosed that there were a lot of affiliatedtransactions between Daqing and Everbright Co, which was the majority shareholder of Daqing. Mr Ding wasrecommended by Everbright Co and appointed by Daqing’s board of directors, which was substantially influenced byEverbright Co. With a series of such transactions Daqing transferred huge profits to Everbright Co and adverselyaffected Daqing.
Required:
问答题
(a)State whether Ms Huang was entitled to take legal action against Mr Ding for his illegal behaviour ofaccepting bribes which adversely affected all the shareholders.(2 marks)
【正确答案】Mr Ding’s act of accepting bribery violated the criminal law and the relevant rules of the Company Law as well. Besides thecriminal charges, he should be liable for his fraudulent behaviour of damaging the interests of Daqing and its shareholders.Therefore, Ms Huang was entitled to bring a law suit against general manager Mr Ding on the ground that his acts causedher loss of interests.
【答案解析】
问答题
(b) State TWO different legal actions Ms Huang was entitled to take to protect the rights of Daqing and itsshareholders due to the affiliated transactions with Everbright Co.(4 marks)
【正确答案】With respect to Daqing’s damage, Ms Huang should first request the board of directors or supervisory board to take legalaction against Everbright Co. Where these two bodies refuse to take reasonable actions, Ms Huang might, in her own namebut for the interests of the company, bring a shareholder representative litigation against Everbright Co. On the other hand,she might also bring a direct litigation against Everbright Co on the ground that the connected transactions caused indirectdamage to the shareholder’s interests.