Mutual litigation between Wantong technology and its subsidiary executives or “preheating” for shareholders’ meeting in advance

After Wantong technology twice sued Yi Zenghui, a subsidiary of saiying technology, for breach of contract in October, Yi Zenghui also responded. On October 28, the reporter of China Securities News obtained an indictment submitted by Yi Zenghui to Chengdu Chenghua District Court. Yi Zenghui requested to order Wantong technology to continue to perform article 14.2 of the agreement on share issuance and purchase of assets of Chengdu Saiying Technology Co., Ltd., which states that “after the completion of this transaction, Party A (Wantong Technology) agrees to maintain the management of the target company (Saiying Technology) The existing management team of the target company will be granted the corresponding decision-making power on the daily business operation and development of the target company, and the shareholder’s decision to remove the director of saiying technology is revoked. Yi Zenghui introduced that the court has accepted the prosecution. < / P > < p > it is worth noting that Wantong technology plans to hold the second extraordinary general meeting of shareholders in 2020 on November 20 to consider the proposal of Yi Zenghui and Nanfang Yingu, the largest shareholder of Wantong technology, to recall Li Zhen and other four directors. The reporter of China Securities News noted that there was a difference of about 5% between the shares held by the two camps of Wantong technology, while the shareholding of Yi Zenghui accounted for 3.48% of the total equity of Wantong technology, which was crucial for the outcome of the shareholders’ meeting at that time. People who have been following Wantong technology for a long time have pointed out that Wantong technology may have the intention to influence the voting result by offering litigation matters on the eve of the shareholders’ meeting. < p > < p > the reporter of China Securities News learned that the three plaintiffs, Yi Zenghui, Tang Shirong and Yao Zongcheng, were the management of Chengdu Saiying Technology Co., Ltd. (hereinafter referred to as “saiying technology”), and the complaint was signed on October 20. < p > < p > according to the complaint, on September 7, 2017, Yi Zenghui, Tang Shirong, Yao Zongcheng and other saiying technology shareholders and Wantong technology jointly signed the asset purchase agreement on Chengdu Saiying Technology Co., Ltd. (hereinafter referred to as the “asset purchase agreement”), according to the agreement, Wantong technology purchased Yi Zenghui and other saiying by issuing shares The 100% equity of Saiying Technology (hereinafter referred to as the “transaction”) held by the technology shareholders is 430 million yuan. Wantong technology paid all the transaction consideration by non-public offering of 31.8755 million shares. At the same time, as one of the important conditions of the above-mentioned transaction, article 14.2 of the asset purchase agreement stipulates that after the completion of the transaction, the defendant agrees to keep the management personnel of saiying technology basically unchanged, and grants the existing management team of saiying technology the corresponding decision-making power on the daily business operation and development of saiying technology. In addition, article 21.2 of the asset purchase agreement also stipulates that “the defaulting party shall bear the liability for breach of contract to the observant party in accordance with the provisions of this Agreement and the law, and compensate the observant party for all losses (including reasonable expenses for avoiding losses) caused by its breach of contract. < / P > < p > on June 7, 2018, Wantong technology made a shareholder’s decision to elect Yi Zenghui, Tang Shirong, Yao Zongcheng and two persons appointed by Wantong technology as directors of saiying technology. Their term of office is three years from the date of the shareholder’s decision. On the same day, the board of directors of saiying technology made a resolution to appoint Yi Zenghui as the general manager of saiying technology for a term of three years from the date of the resolution of the board of directors. < / P > < p > according to the complaint, on September 23, 2020, the defendant (Wantong Technology) made a shareholder’s decision to remove Yi Zenghui, Tang Shirong and Yao Zongcheng as directors of saiying technology, and elected Liu Jinggang, Zhang Hongbo and Shuai Hongmei as directors of saiying technology. On the same day, the board of directors of saiying technology made a resolution to elect Liu Jinggang as the chairman of saiying technology 。 < p > < p > after Wantong technology made the above-mentioned shareholder’s decision, Yi Zenghui said in the complaint that the above-mentioned shareholder’s decision of Wantong technology had seriously violated the provisions of article 14.2 of the asset purchase agreement, and yizenghui had repeatedly raised objections to Wantong technology and requested to cancel the above shareholder’s decision, but Wantong technology has refused to do so. Wantong technology announced the indictment in Hefei on October 19. Wantong technology said that as an important premise and component of the restructuring transaction, Yi Zenghui and others signed the relevant commitment letter, promising that “from the date of signing this commitment letter to 36 months after the completion of the reorganization, I (including the enterprises controlled by me and other persons acting in concert) will not pass the lawsuit, including but not limited to the increase of shareholding To obtain the voting rights of the listed company in any way, such as shares of the listed company, acceptance of entrustment, solicitation of voting rights, agreement, etc.; guarantee not to increase the shares of the listed company directly or indirectly in any way, nor take the initiative to increase the shares of the listed company directly or indirectly through other related parties or persons acting in concert… ” However, during the commitment period, Yi Zenghui signed the agreement on persons acting in concert with Nanfang Silver Valley Technology Co., Ltd. on September 14, 2020, which directly violated its commitment not to increase the company’s shares directly or indirectly in any way. < p > < p > Wantong technology requested to cancel 14.344 million shares held by Yi Zenghui, accounting for 3.48% of the total share capital of the company. According to the company’s closing price of 10.75 yuan / share on October 15, the market value of the above shares is 154 million yuan, accounting for 7.06% of the latest audited net assets of the company. < p > < p > Yi Zenghui refuted that based on the relatively dispersed equity of Wantong technology at that time, the commitment was made to ensure the actual control of Wantong technology by Wang Zhongsheng, Yang shining and Yang Xinzi. Wang Zhongsheng and others will no longer be the actual controllers of Wantong technology from March 7, 2019, and Wantong technology has been in the state of no controlling shareholder and no actual controller since August 20 this year. The basis of the commitment has been lost, and objectively it is no longer qualified to continue to perform. < / P > < p > it is worth noting that Wantong technology disclosed on the evening of October 27 that the company sued saiying technology and Yi Zenghui for changing the registration of saiying technology. The Chengdu Chenghua District People’s court accepted the case on October 27. < p > < p > according to the announcement, on September 23, Wantong technology made a shareholder decision to remove Yi Zenghui, Yao Zongcheng and Tang Shirong as directors of saiying technology, and re elected Liu Jinggang, Zhang Hongbo and Shuai Hongmei as directors of saiying technology; on the same day, saiying technology made a resolution of the board of directors to elect Liu Jinggang as the chairman of the company, and in accordance with the articles of association of Chengdu Saiying Technology Co., Ltd It is stipulated that the chairman of the board is the legal representative of the company. < p > < p > Wantong technology said that after the decision of shareholders and the resolution of the board of directors were made, Wantong technology sent a letter to saiying technology and yizenghui, requiring saiying technology and the former legal representative and chairman Yi Zenghui to handle the relevant change filing procedures in a timely manner. After being urged by Wantong technology for many times, saiying technology and Yi Zenghui refused to cooperate. Due to Yi Zenghui’s refusal to hand over the company’s seal, license and other materials to Liu Jinggang, the new legal representative of saiying technology, it is impossible to handle the change of registration items, and Wantong technology may lose its control over saiying technology. < p > < p > Wantong technology requested a judgment that saiying technology applied to the registration authority for saiying technology’s directors to be changed from Yi Zenghui, Yao Zongcheng and Tang Shirong to Liu Jinggang, Zhang Hongbo and Shuai Hongmei; saiying technology’s legal representative and director general were changed from Yi Zenghui to Liu Jinggang; Yi Zenghui was judged to assist saiying technology in applying for the above-mentioned matters Change registration. According to the company law, it is normal for the parent company to take over the subsidiary. However, in connection with the struggle for control since March this year, Wantong technology’s purpose of initiating a lawsuit at this time is self-evident. < p > < p > the reporter of China Securities News noted that on the eve of the lawsuit of Wantong technology, the board of supervisors of Wantong technology approved the matter that Yi Zenghui and Nanfang Yingu proposed to hold an interim shareholders’ meeting. Wantong technology announced after hours on October 15 that the fifth meeting of the Fifth Board of supervisors of the company was held in the meeting room of the company on the same day, and the proposal on holding the company’s second extraordinary general meeting in 2020 was deliberated and passed. With the passage of the two motions, Wantong technology plans to hold the second extraordinary general meeting of shareholders in 2020 on November 20 to consider the motion on the removal of four directors including Li Zhen. There are nine seats in the board of directors of Wantong technology. This time, Yi Zenghui proposed to remove four directors. If the removal is approved by the general meeting of shareholders, it will certainly affect the power structure of Wantong technology. Wang Zhihui, partner of Zhejiang Gaoting law firm, told China Securities News that the court would not make a judgment in the near future because of the requirements of the litigation procedure. Equity voting will not be affected by these two cases. < / P > < p > Disclaimer: the purpose of this article reprinted by china.com finance and economics is to convey more information and does not represent the views and positions of the website. The content of this paper is for reference only and does not constitute investment advice. Investors operate accordingly and bear their own risks. The State Administration of press and publication of the State Council is the key website of the State Administration of press and publication. 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