The Case Analysis Of Hongri Company,Jiang Yang V.Kechuang Company Dispute Of Capital Increase

At present,China's corporate law is limited in judging the effectiveness of the resolution of shareholder meeting and exercise of preemptive right.Provisions of the law are too general,and do not form a perfect system,which results in the lack of clear legal guidance in practice,as a consequence,disputes on corporate capital increase occur from time to time.The "Case of Mianyang Hongri Industrial Co.,Ltd.,Jiang Yang v.Mianyang High-tech Zone Kechuang Industrial Co.,Ltd regarding disputes on the effectiveness of the resolution of shareholder meeting and corporate capital increase" is a typical case.There are three controversial focuses in the case:First,whether the resolution of shareholder meeting in Kechuang company to absorb Chen as a new shareholder is invalid;Second whether the share purchase agreement signed by Kechuang company and Chen is invalid;Third whether Hongri company and Jiang Yang has the preemptive right to subscribe for the newly-added capital of 8 million.Ultimately,combining with the relevant legislation,judicial practice and theory to analyze the case we can come to the following conclusions:First,the shareholder meeting in Kechuang company is invalid;Second,the share purchase agreement involved in the case can be deemed to be valid.Third,Hongri company and Jiang Yang cannot exercise preemptive right in the case.Finally,it provides reference for improving the rule of preemptive right in three aspects:to limit the scope for exercising preemptive right,to clarify its exercise time,to clarify the path of remedy.