Research On The Civil Liability Of Independent Directors In China Based On The Kangmei Pharmaceutical Case

The series of cases involving civil,criminal,administrative and bankruptcy cases has set many precedents in China’s legal practice,especially the civil compensation case for misrepresentation of securities of Kangmei Pharmaceuticals(hereinafter referred to as the Kangmei Pharmaceuticals case),which for the first time imposed heavy penalties on independent directors,and the sky-high joint and several liability in the industry of independent directors caused This is also the most controversial part of the Kangmei Pharmaceuticals case,which has led to a "tide of departures" of independent directors of listed companies.Therefore,it can be said that the emergence of the Kangmei Pharmaceuticals case marks the crossroads of reform in China’s independent director system and the critical moment of introspection and reconstitution.Although the intent and positive significance of the Kangmei Pharmaceuticals case is to solidify the responsibilities of independent directors and promote the active and diligent performance of independent directors,it is undeniable that the case has had a chilling effect on the independent director industry,with the sky-high joint and several liability of the independent directors involved in the case triggering severe social repercussions and putting the independent director industry at risk,leaving the long-standing independent directors at a loss.In the case of securities class action lawsuits,the number of cases in which independent directors will be held civilly liable is bound to increase in the future,so the civil liability system for independent directors in China needs to be improved.The independent director system has been introduced into China for more than20 years as an "imported product" through legal transplantation,and during this period,the academic and industry sectors have mixed opinions on the role of independent directors and the effectiveness of the system,although some independent directors play an important role in the governance process of listed companies,most of them still play little role and are even considered They are even considered as "vase directors".When introducing the system of independent directors in China,it can be said to have high expectations,giving many special functions to independent directors,and while giving functions and obligations,the liability of independent directors should also be improved,but China’s legislation has always lacked special provisions on the liability of independent directors,especially the lack of relevant provisions on civil liability.At the time of the revision of the draft company law,it is necessary to seize the epoch-making case of Kangmei Pharmaceuticals in the development of the independent director system,and conduct a profound analysis on the determination of the civil liability of the sole director and the assumption of liability in the case,so as to promote the reform and reconstruction of the civil liability system of independent directors in China.This paper first presents and analyzes the facts of the Kangmei Pharmaceuticals case,returns to the civil liability system of sole directors in China,and concludes that the case is the beginning of the civil joint and several liability of sole directors in China;secondly,it analyzes the claims and defenses of both parties in the Kangmei Pharmaceuticals case,and then discusses the status of the case in the landing of civil liability of sole directors in China in relation to the system of sole directors in China;again,it evaluates the part of the judgment of the Kangmei Pharmaceuticals case concerning the liability of sole directors,and concludes that the case is a landmark in the development of the civil liability system of independent directors in China.In addition,this paper also provides a general review of the Kangmei Pharmaceuticals case in terms of judgment mechanism,normative interpretation,value and trend analysis,and concludes that the case is a practical construction of the civil liability of sole directors in China.Finally,through the above profound analysis of the liability of sole directors in the Kangmei Pharmaceuticals case,we suggest the construction of the civil liability system for sole directors in China from the aspects of institutional principles,performance protection and liability limitation,so as to explore the future path of reforming the civil liability system for sole directors in China.