In relation to corporate behaviour and legal liabilities: (a) explain the term controlling shareholder under the Company Law of China; (b) explain how the creditors may take legal action against the shareholder of a company for abusing the independ

Yado Steel Co Ltd (Yado Steel) entered into a loan agreement with Industry Bank to borrow RMB 20 million yuan for its expansion programme. Yado Steel provided its office building as property mortgaged for the debt, and made the registration as required. Mr Ding, one of the shareholders of Yado Steel, placed a guarantee letter of general liability in favour of Industry Bank.

Due to poor performance, Yado Steel failed to repay the debt when it came to maturity. Meanwhile, Industry Bank, under a restructuring plan, transferred the credit of RMB 20 million yuan together with the right of pledge to Oriental Assets Management Co (OAM). It also made a written notice to Yado Steel and Mr Ding, but failed to transfer the right of mortgage to OAM. On the contrary, Industry Bank concluded an agreement with Yado Steel before it went bankrupt, and settled other debts owed by the latter through the sale of the office building as mortgaged for the loan. Having found this fact, OAM, as a transferee of the credit, requested the court to order Mr Ding to bear its guarantor’s liability for the debt. Mr Ding asserted that he was a pledger with a general liability and would be responsible for the debt only if the things mortgaged could not satisfy the debt.

Required:

Answer the following questions in accordance with the relevant provisions of the Property Law and the Contract Law, and give your reasons for your answer:

(a) State whether the defence of Mr Ding should be supported by the court.

(b) State what was the cause of this dispute between OAM and Industry Bank.

 In relation to the basic legal system of China:

(a) (i) explain the term judicial interpretation; (3 marks)

(ii) explain the legal basis for the Supreme People’s Court to issue a judicial interpretation. (3 marks)

(b) Article 428 of the Contract Law of China provides that upon the implementation of this law, the previous contract laws shall be simultaneously abolished. Based on this provision, the Supreme People’s Court has issued a Judicial Interpretation on the Application of the Contract Law.

In relation to this Judicial Interpretation, state the rule of the applicable law to deal with a contractual dispute brought to the people’s court after the date of implementation of the Contract Law but the contract was concluded before that date. (4 marks)

In relation to the Labour Contract Law of China:

(a) explain the circumstances in which a labour contract is not allowed to incorporate a provision of probation.

(b) explain the relevant restrictions on the PERIOD of probation in a labour contract.

Due to the failure to settle the debts due, Jianshe Garment Trading Co Ltd (Jianshe Co) was declared bankrupt by its creditors. In October 2010 the court rendered an order to accept the application of bankruptcy and designated a bankruptcy administrator. During the process of bankruptcy liquidation the bankruptcy administrator found that Jianshe Co had given up a credit of RMB 200,000 yuan owed by its affiliate enterprise in August 2009.

The bankruptcy administrator also found that some shareholders of Jianshe Co failed to made full capital contributions as prescribed in the agreement of incorporation.

Required:

Answer the following questions in accordance with the Enterprise Bankruptcy Law of China, and give your reasons for your answer:

(a) (i) State whether the action of giving up credit can be revoked during the process of liquidation;

(ii) State whether the court should grant an order to revoke the act of giving up credit.

(b) State how to deal with the matter of the lack of full capital contributions by some of the shareholders of Jianshe Co.

Yado Steel Co Ltd (Yado Steel) entered into a loan agreement with Industry Bank to borrow RMB 20 million yuan for its expansion programme. Yado Steel provided its office building as property mortgaged for the debt, and made the registration as required. Mr Ding, one of the shareholders of Yado Steel, placed a guarantee letter of general liability in favour of Industry Bank.

Due to poor performance, Yado Steel failed to repay the debt when it came to maturity. Meanwhile, Industry Bank, under a restructuring plan, transferred the credit of RMB 20 million yuan together with the right of pledge to Oriental Assets Management Co (OAM). It also made a written notice to Yado Steel and Mr Ding, but failed to transfer the right of mortgage to OAM. On the contrary, Industry Bank concluded an agreement with Yado Steel before it went bankrupt, and settled other debts owed by the latter through the sale of the office building as mortgaged for the loan. Having found this fact, OAM, as a transferee of the credit, requested the court to order Mr Ding to bear its guarantor’s liability for the debt. Mr Ding asserted that he was a pledger with a general liability and would be responsible for the debt only if the things mortgaged could not satisfy the debt.

Required:

Answer the following questions in accordance with the relevant provisions of the Property Law and the Contract Law, and give your reasons for your answer:

(a) State whether the defence of Mr Ding should be supported by the court.

(b) State what was the cause of this dispute between OAM and Industry Bank.

In October 2008 Ronger Properties Joint Stock Co successfully issued corporate bonds of RMB 12 million yuan for three years. By the end of 2010 the net assets of Ronger Properties Joint Stock Co were RMB 80 million yuan. During the past two years it has been able to repay the interests due for the corporate bonds.

In order to expand its business, the board of directors of Ronger Properties Joint Stock Co adopted a resolution intending to issue another set of corporate bonds to the public investors.

Required:

Answer the following questions in accordance with the relevant provisions of the Securities Law of China, and give your reasons for your answer:

(a) State the maximum amount of corporate bonds Ronger Properties Joint Stock Co could issue for the proposed issuance.

(b) State whether the proposed issuance of corporate bonds should be underwritten by an underwriting syndicate.

(c) State the statutory period of underwriting for the proposed issuance.

In relation to corporate behaviour and legal liabilities:

(a) explain the term controlling shareholder under the Company Law of China;

(b) explain how the creditors may take legal action against the shareholder of a company for abusing the independent legal entity, and the doctrine of law for such legal action;

(c) explain the civil liabilities of the controlling shareholder for the damage of the company through affiliate trading.

2013年12月31日，甲公司某项固定资产计提减值准备前的账面价值为1 000万元，公允价值为980万元，预计处置费用为80万元，预计未来现金流量的现值为1 050万元。2013年12月31日，甲公司应对该项固定资产计提的减值准备为(　　)万元。

A. 0

B. 20

C. 50

D. 100

甲公司记账本位币为人民币，2018年年末其持有的一项由国外购入的设备出现减值迹象，甲公司对其进行减值测试。经测试，其公允价值为184万美元，预计相关处置费用为8万美元;如果继续使用此设备，预计尚可使用3年，每年产生的现金流入均为100万美元，同时每年还将产生30万美元的现金支出，使用期满会发生8万美元的现金支出。假设每年发生的现金流入和流出都发生在年末，美元适用的折现率为10%，2018年年末人民币兑美元的汇率为1：6.5。则该设备的可收回金额为人民币(　　)万元。[(P/A，10%，3)=2.4869;(P/F,10%,3)=0.7513]

A. 174.08

B. 176

C. 1131.52

D. 1144

2X18年12月31日，甲公司一台原价500万元，已计提折旧210万元，已计提减值准备20万元的固定资产出现减值迹象，经减值测试，其未来税前和税后净现金流量现值分别为250万元和210万元，公允价值减去处置费用后的净额为240万元，不考虑其他因素，2X18年12月31日甲公司应为该固定资产计提减值准备的金额为( )万元。

A. 50

B. 30

C. 60