Founder shareholder sues: 58 shares in the city have been disputed

Beijing time October 31 is 58 with the city in the United States listing days, this is its second standing in the door of the listing, and this time, 58 with the city met the "sniper."

Recently, its founder shareholder, Beijing Sun Shadow Film and Television Technology Co., Ltd. Chairman Liu Xuanxian to Hubei Xiaogan Xiaonan District People's court, said that its shareholders ' interests were infringed, and asked the court to decide Chenghandong business Opportunities Online (Beijing) Network Technology Co., Ltd. (hereinafter referred to as "business opportunity Online Company") held 17.5% 58 of the same city share transfer to 58 with the city founder, chairman and CEO Yiu Jingbo behavior is invalid. The case will be heard on November 28, 2013.

"Investors and shareholders will certainly pay attention to this matter, after all, for them, the company will be listed in any news is a risky value." "Senior Internet analyst, Nanjing Xun Tong CEO bin told the China Business newspaper reporter."

"Once a lawsuit is taken, the stakes can theoretically be frozen for 3-6 months," he said. "Duqingchun, a senior partner at the Beijing Dacheng law firm, said," and once the court confirms that an equity transfer agreement is invalid or revoked, it could directly change the real ownership structure of the city of 58, which is a subversive effect. ”

"In the critical period of the IPO, these adverse effects are likely to make 58 of the city ' submission ', the two sides to reach a settlement is more likely." "In fact, losing the lawsuit is obviously more advantageous to Liu Xuan and Chenghandong, and to some extent it is a community of interests," said one industry insider who declined to be named. In addition, the plaintiff selected in the case of Chenghandong in Hubei, the residence of the prosecution, but also quite intriguing place.

Staring

The story of Liu Xuan 58 with the city has to be said from 2005.

December 2004, Liu Xuan paid Chenghandong, etc. jointly initiated the establishment of business opportunities online company, Chenghandong as chairman of the company and legal representative, directly responsible for the company's operation and Management; 2005, business Opportunities Online Company and Yiu Jingbo jointly sponsored the establishment of Beijing 58 Information Technology Co., Ltd. (hereinafter referred to as "58 Beijing"), Main www.58.com namely "58 City", Business opportunity Online Company holds 25% equity, Yiu Jingbo as legal representative.

The reporter learned that, at that time, Yiu Jingbo also held a certain share in the business opportunity Online company. "We are friends, we belong to the chain of entrepreneurship." Liu Xuanxian and Chenghandong all told reporters.

According to Liu Xuanxian to the reporter showed that in June 2006, with the consent of shareholders, the opportunity online company and Yiu Jingbo signed the "Stock rights on behalf of the agreement", will have 58 of the Beijing 17.5% stake to Yiu Jingbo, by Yiu Jingbo as the nominal shareholder of the 17.5% equity. April 2007, Business Opportunity Online Company and Yiu Jingbo continued to sign the agreement on behalf of shareholders, business online companies continue to have 58 of the 17.5% of Beijing's stake to Yiu Jingbo.

"There has been no subsequent signing of the Agreement on behalf of the de facto." Liu Xuanxian said that because he believed in Yiu Jingbo's management ability, he has not been involved in the specific situation of the investment. He was reminded of the investment by the news of 58 of the city's upcoming U.S. listings in October this year.

But to Liu Xuan's surprise, it was found that the 58 Beijing stake held by the business online company had been transferred to Yiu Jingbo. "In December 2009, without the consent of shareholders and did not inform me of the circumstances, Chenghandong use of the company and the official seal of the convenient conditions, in the name of Business online company and Yiu Jingbo signed a private agreement, to give up the holding of the 58 Beijing 17.5% Equity." "Liu Xuanxian said.

For the Liu Xuan, Chenghandong told reporters, before there is with Liu Xuan pay oral notice, told the latter, "(in the net Online Holdings Limited, hereinafter referred to as ' online ') to be listed, need to do related equity stripping, to talk to Yiu Jingbo. He (Liu Xuanxian) said, that is to understand the next 58 of the city's relevant situation. ”

"I told Yiu Jingbo shortly after, he sent a man to my company to get an agreement for me to sign." We were going to go public, more anxious, also out of the trust of friends, there is no shareholder vote, lawyer confirmation, and other procedures, think is the first thing to do, the next step, the corresponding rights and interests of the entrepreneurial shareholders, the more rough sign of the transfer of equity agreement. "Chenghandong told reporters that Liu Xuan pay did not make a confirmation of the agreement on the transfer of shares signed.

It is reported that the opportunity online company for the China-Net online wholly-owned subsidiary, March 4, 2010, the network online in the U.S. stock Exchange officially listed as the first in the United States listed in the Chinese Internet investment enterprises.

It is the right to pay to the entrepreneurial shareholders, let Liu Xuanxian think, "I did not receive the corresponding price, seriously damaging my interests." To say the worst, the theory is a fraud, there are a lot of tricks. ”

And Chenghandong also said that did not receive the payment of the price, his own 58 Beijing has very little information, "as a shareholder, how never held a shareholder meeting?" Due to asymmetric information, 58 of the city's specific operating situation does not understand, then we worry about stripping equity listing, equity transfer agreement did not pay the corresponding price to make provisions, Yiu Jingbo was only verbally said if we (58 city) listed, will give some returns. ”

Chenghandong said that the matter to this stage, we have objections, but still far from the point of enemy. "He (Yiu Jingbo) has been telling me, 58 city is very miserable, very bad." Everyone is a start-up brother, wait for good, will not treat anyone. Chenghandong said that at present, he also invited the lawyers to comb the 58 signed with the city of some agreements, 58 of the city to its disclosure details, and then see how to deal with the next step. Because a lot of things are not clear. "The possibility of an appeal is not ruled out. ”

Those in the industry who said they did not want to be named say that if the court decides that an Equity transfer agreement is invalid, it means that the business-line company will become a 58-city shareholder again, and Chenghandong is a major shareholder in the business online company. If the final Chenghandong loses, Chenghandong becomes the biggest beneficiary. From this point of view, Liu Xuan and Chenghandong is a community of interests, but also the suspicion of collusion. ”

"It's very sudden for me. How is it possible that I am the defendant and say collusion? "Chenghandong told reporters," Our enterprise has no special norms to do, basically is the boss to decide, so many years have passed, many details I also remember not very clear, at present I also ask the lawyer to comb, in the end in this face he has what problems, I have what problems. ”

"I'm still [an opportunity online company] shareholder, which is a fact that can't be changed, but I don't think I'm in collusion with Chenghandong." My legitimate rights and interests have been violated, why can not protect rights? Liu Xuanxian said, "I am not a small shareholder, do not want to discuss how much money to take back the question, 58 the name of the city I also have a participation, I have feelings for it." ”

Dispute "void"

But Liu, Cheng two people said that the non-payment of the price of the argument has not been Yiu Jingbo recognition.

Yiu Jingbo through 58 Beijing to the reporter said that the agreement is to terminate the opportunity online company in 58 Beijing Holdings, Yiu Jingbo also transferred its own business opportunities in the online company's shares, in fact, "both sides no longer hold each other's equity." "At that time, China online to the U.S. market, business online company's shares are very valuable, and Yao also gave up a good dividend, give up the equity and dividends should be the right price." "said one person familiar with the matter.

"To the price or the share transfer, where is the stake?" Liu Xuanxian says there's a lot of uncertainty.

Yiu Jingbo said he was a bona fide third person. The agreement was signed in December 2009 on the proposal of the legal representative of the business Opportunity Online Company, Chenghandong. The agreement was signed by the legal representative of the business online company Chenghandong and stamped with the official seal of the business online company. The agreement was signed out of trust, and the Chenghandong is considered to be the legal representative of an opportunity online company and has the right to represent the opportunity online company, not knowing that the opportunity online company or its legal representative needs to notify or solicit the views of the small shareholder of the business Opportunity Online company. ”

But Liu Xuan does not accept this claim. "They (Chenghandong and Yiu Jingbo) signed an Equity transfer agreement, involving the abandonment of business opportunities online company commissioned Yiu Jingbo to hold 58 Beijing 17.5% of the stake, which is a major investment in business online companies. According to the 38th article of the PRC Company law, the disposal of the equity shall be agreed by all the shareholders in the online business, and signed and stamped by all the shareholders in the decision document. Chenghandong and Yiu Jingbo, respectively, as the Chairman of the business Opportunity Online company and the chairman of the 58 Beijing, should be aware of the legal provisions, especially those previously signed similar agreements have been approved by shareholders. Chenghandong should provide business opportunities online company resolution documents, Yiu Jingbo should also request Chenghandong to provide business opportunities online company resolution documents. ”

Liu Xuanxian said that his lawsuit request has three: first, confirms Chenghandong to use the business opportunity On-line company management right, does not have the Liu Xuan to pay the consent to dispose the stock rights infringement without authorization; second, the decree Chenghandong to take advantage of the opportunity to sign with Yiu Jingbo on behalf of the business online company in the name of the 58 Beijing The third is to confirm that Liu Xuanxian in 58 Beijing enjoy 6.3% of the equity.

"The company's China law firm, the Han-kun law firm, believes that according to the PRC contract law, the legal representative of the business Opportunity Online company signed and the company's official seal proves that the termination of the contract is in accordance with the contract law, so that the agreement is effective and has legal benefits, Mr. Yao is a bona fide third party. "58 Beijing replied to our correspondent.

Xu Junyong, a lawyer at Beijing Marriott law firm, told reporters, "Although Chenghandong and Yiu Jingbo signed an Equity transfer agreement without the business opportunity Online Company's internal decision-making process, but for the equity assignee, it is the relative of the signing of the transferee agreement for business Opportunities Online company, its internal decision-making is not related to the equity assignee. And under the current legal framework of our country, the company's legal representative and official seal are sufficient to represent the company's meaning. Therefore, according to the above stipulation, the internal flaw cannot cause the share Transfer agreement to be invalid. ”

Duqingchun that, unless you can identify Yiu Jingbo and Chenghandong malicious collusion, it is difficult to determine the contract is invalid. "Liu Xuan Sanjo Change the litigation strategy, will argue that the reasons for the invalidity of the contract, from the existence of internal decision-making flaws to Yao and Cheng malicious collusion, the claim that the contract is invalid in theory more standing, but the burden of proof will become very big." "In addition, regarding the two sides in the equity transfer agreement has not agreed on the price of the issue, Duqingchun that, if so, Liu Xuan and business opportunities online companies can argue that the transfer agreement for lack of contract elements, the two sides are still shareholders of the relationship."

Bleeding listing

Li Yafei, director of the law firm, said that the U.S. review of listed companies is more stringent, for the purpose of protecting investors, if there is a major lawsuit, the company needs to disclose, which may have some impact on its IPO. "A cautionary tale can be seen at Tudou, whose founder Wang's divorce case was ' stopped ' a few months ago, and the capital markets may have some changes in a few months ' time. Of course 58 of the same city litigation involved less than Tudou, the impact is difficult to generalize. ”

Apparently 58 of the city's luck is better than Tudou's. October 31, 58 with the city as scheduled ringing the New York exchange's big clock.

2005 58 with the city on-line, coincided with the highest point of web2.0 wave, the United States Craigslist To do the target, 58 with the city to obtain high expectations of venture capital. SoftBank has invested 5 million and 40 million dollars in two investments, and has since invested 15 million dollars with DCM. At the time, investors and entrepreneurs believe that 58 of the city will be listed within 5 years. However, in June 2008, because of the Vie event, credit problems, in the middle of the cold and other internal and external environmental impact, 58 of the city to be listed.

While Shanda, potatoes, and Alibaba are ready to privatize from U.S. capital markets, the city of 58 has opted to go to the U.S. market.

"In the current social environment, 58 of the city must be listed, the first is the shareholder demand for return, followed by their own development is limited, and finally is such a large plate, not listed will continue to lose money." "Bin said.

58 The same city is the domestic classified information network giant. According to the data provided by the consultation, the 2012 China Online Classification information market, based on the cash income calculation, 58 of the city's market share of 38.1%, the market first place.

In the past few years, this "magical website" is suffering from unprecedented public opinion and market criticism, the capital chain broken, flow decline, spam and business models, and so on. It is widely believed that a single business model that earns revenue only on the basis of online promotion and membership is hard to get the continued pursuit of capital.

The prospectus shows that in the first half of this year, 58 city membership fees, online marketing services, online trading commissions accounted for 58 of the city's total revenue 59%, 39.4% and 1.6%. Online transactions, including group buying, accounted for only 1.6% per cent of commission income.

"From the business model, 58 of the same city is more like Taobao, and as far as I know, joined 58 of the city's cooperation units have closed, or business volume decline; for 58 of the city, a few years ago, shouted on the listing, only on the basis of the immature conditions of all aspects, the listing will not succeed, therefore, in recent years, 58 with the city's various cost increases, the fund chain is constantly under threat. "Bin Said," 58 City listing is the only way out, not listed, die. ”

Earnings showed that 58 per cent of the city's revenues from 2010 to 2012 were 10.7 million U.S. dollars, 41.5 million dollars and 87.1 million dollars, but had been at a loss for three years, 13.9 million dollars and 83.4 million dollars respectively. And since September 28, after the submission of prospectuses, 58 with the city three updates, a high-profile update of three quarterly earnings information. The prospectus shows that in the two quarter of this year, 58 of the city for the first time to achieve losses, to achieve a net profit of 300,000 U.S. dollars, the third quarter of the company's total revenue of 41.6 million U.S. dollars, gross margin of 39.3 million U.S. dollars, net profit of 8.5 million U.S. dollars. A person in the industry believes that 58 of the city is likely to be listed on the (performance) downhill. 58 The purpose of listing with the city is very simple, not to do things but to circle money, money circle, naturally will not take into account how good performance. ”