Comment On Lin Chengen V. Li Jiangshan And Other Cases Of Infringement Of Company Rights

Since the beginning of the 21 st century,with the further deepening of reform and opening up,China's market economy and company operation mode have undergone great changes.Although the single form of market operation mode and company operation mode are dominant,new things such as holding group,parent company and subsidiary company are also thriving.They are more closely related and have more complex control relationships than the average company.China's existing law focus on protecting the operation of companies and shareholders' rights and interests under the primary governance model,but in face of new things such as affiliated companies and subsidiaries,the existing law are difficult to fully protect the legitimate rights and interests of small shareholders.Three controversial points are involved: firstly,whether the plaintiff in the first instance is qualified.secondly,whether the defendant has used his power to steal business opportunities belonging to the company.Thirdly,whether the defendants in the first instance violate others' rights.The plaintiff in the first instance is the shareholder of the parent company,but in order to achieve the purpose of substantive trial,the Supreme Court changed the case from dual shareholder representative litigation to the shareholder's representative action through transferring the business opportunities to the parent company,which made the plaintiff qualified to prosecution.But according to the current company law,the plaintiff is not qualified.Because the development and use right of 115 acres of land involved in the case are conditionally obtained by public bidding through the listing of the right to use state-owned land,so it is not a business opportunity exclusively belonging to Jiangxi Xinlun Company.The defendant did not steal business opportunities belonging to the company.In similar cases,because our country does not recognize the dual representative action of shareholders,many parent company shareholders(case 2)can not blame for directors,supervisors and senior managers of subsidiaries for infringement of subsidiaries' rights and interests on behalf of subsidiaries.There is no fixed standard for the court to hear the cases concerning the dual representative action of shareholders.It can be concluded that the subsidiary companies with wholly-owned by parent companies are basically united into the shareholder representative action,and the subsidiary companies with non-whollyowned by parent companies are generally determined by the court that theshareholders of the parent company are not qualified to sue and can not enter the substantive trial procedure.Both economic development and legal progress require us to establish the dual shareholder representative litigation system as soon as possible.While clarifying its theoretical basis,we should pay attention to the differences between the dual shareholder representative litigation system and the shareholder representative litigation system.By exploring the applicable premise,qualified plaintiff and pre-procedure of the dual shareholder representative litigation,we can provide conditions for the it's early establishment.