A Study On The Disputes Of Lehui Company Vs.Xie Fang Injury The Company’s Interests

Directors and executives have a loyal obligation to the company,which restricts the rights of directors and executives of the company and is conducive to protecting the interests of the company.It is an important system in China.Among them,the competition prohibition system is a derivative obligation of the loyalty obligation.The resulting right of company integration is also of great significance in balancing the interests of the company with the p ersonal interests of directors and executives.However,due to the imperfection of the existing regulations in China,the judgments in different places show great differences,and the uncertainty of the judiciary has resulted in the low credibility of the judiciary.Therefore,it is necessary to clarify the prohibition of competition and the right to reincorporation.The “Le Hui Company v.Xie Fang Damage to the Company’s Interest Case” was a dispute between the company and senior management personnel(here inafter referred to as “executives”).The core controversy in this case is twofold: first,whether Xie Fang has established a prohibition against competition.The second is whether the company can exercise vesting right against Xie Fang,and the amount of vesting.Regarding the determination of the prohibition of competition,the focus is on a deep analysis of the specific meaning of each element.In this case,to establish a prohibition against competition,we need to examine whether it is a "similar busine ss",whether it meets the "self-employment or operating for others",and distinguish between the relationship between "prohibition against competition" and "stealing company opportunities." Specifically,Xie Fang,as an executive of Le Hui Company,must fulfill the obligation of prohibiting competition;Le Hui Company and Xin Hao Company overlap in their business scope;Xie Fang is the controlling shareholder of Xin Hao Company and operates Xin Hao Company.The court shall determine Xie Fang’s forbidden behavior was established.Regarding the question of whether Le Hui Company can exercise the right of attribution,the key lies in clarifying the constituent elements of the right of attribution.Through the academic norms and judgement analysis,the "three essential elements" are clearly adopted,and then specific to this case.The three constituent elements of the right,so the company can exercise the right to vest in Xie Fang’s income.As for the specific amount to be included,which involves the determination of the word “income”,it should be clear that the scope of “income” refers to all the benefits obtained by the relevant directors and senior executives for breaching their fidelity obligations.Specific to this case,the amount that Le Hui Company can exercise the right of attribution to Xie Fang is all the benefits it obtained through the violation of the fidelity obligation such as prohibition of competition,totaling 219158.30 yuan.Only in this way can we better safeguard the interests of the company and realize the legal fairness and order value.