Analysis Of A Equity Transfer Dispute Between Fosun And SOHO

The article71of the company law stipulates the provisions of the shareholder’spreemptive rights. Thus it can be seen that the shareholder’s preemptive rights is legal.However the regulation is too simple and abstract, which only regulates the othershareholders right of first refusal under the same conditions, and not strictly definedthe specific types and corresponding relief way when the shareholder’s preemptiveright has been violated, thus generating great controversy in the judicial practice. Thiscase triggers a protracted litigation, which involves one party indirectly controls thelower level of the other party by buying its parent company equity. Shanghaiintermediate people’s court hear this case according to the evidence. One aspect ofthis controversy is that whether the behavior violated the preemptive right ofshareholders, another aspect is that whether the equity transfer contract is valid.Because our company law did not make provisions on these two aspects, how to provethis behavior did not infringe the shareholder’s preemptive right, whether use theconcept of "essence greater than form", or from the idea of private law autonomy andthe objective theory of legal interpretation is uncertainty. Meanwhile, how to provethe validity of the contract, from the concept of in the form of legal cover illegalpurpose in the article52of the contract law, or from the nature of the right ofpreemptive rights or the Supreme Court cases and Shanghai Higher People’s Courtguidelines. We need to analyze this controversy in the theory combined with theactual situation.