"Investor Protection-Rules, Risk Knowledge" XXIX.

-- Open the "parachute" and there are ways to protect rights.

When your legitimate rights and interests are violated, how to deal with it? Don't panic, you can protect your rights in a variety of ways, such as by assessing the seriousness of the infringement and the effectiveness of your rights, you can choose to take non-litigation or litigation to protect your rights, and non-litigation includes consultation, mediation, complaints and reporting.

1. what is a shareholder's claim?

The shareholder's right of claim refers to the right to claim against the infringer the right to stop the infringement, return the property, restore the original state, compensate for the loss and so on when the legitimate rights and interests of the shareholder are infringed.

In what ways can 2. shareholders exercise their claims?

Shareholders can choose non-litigation or litigation to exercise their claims.

First, shareholders can defend their rights through non-litigation means such as consultation, mediation, complaints and reporting. Among them, negotiation refers to the direct communication between shareholders and the parties to the dispute, which is low in cost and does not require the intervention of a third party. Mediation is conducted through a neutral and professional third-party mediation organization. China Securities Small and Medium Investor Service Center provides dispute mediation services for small and medium investors, and has established new mediation mechanisms such as litigation and mediation docking and securities mediation docking. Complaints and reports mean that shareholders can make complaints through the 12386 hotline of the CSRC, or report to the inspection department of the SFC and its dispatched offices on securities and futures violations.

If it is not possible to resolve the matter smoothly by way of litigation and there is no arbitration clause, the shareholders may bring an action in a court of competent jurisdiction to seek judicial relief. The law gives shareholders two kinds of litigation rights, direct litigation when the rights of shareholders are directly infringed, and derivative litigation when the rights of the company are directly infringed.

What are the circumstances in which the 3. applies to direct shareholder litigation?

The main reason for a direct action by a shareholder is that the controlling shareholder, director or senior management has violated the legal or agreed rights of the shareholder, or the rights related to the shares held by the shareholder. The direct action of shareholders is for their own benefit, therefore, the essence of the right of action is a kind of self-interest right.

The applicable circumstances of direct action by shareholders include:

The first is the invalidity of the resolution of the general meeting of shareholders or the resolution of the board of directors, the action of revocation, and the action of damages.

It is a lawsuit in which directors and senior executives violate laws and regulations, articles of association, resolutions of the general meeting of shareholders and resolutions of the board of directors and infringe upon the legitimate rights and interests of shareholders when performing their duties in the company.

Third, the litigation of controlling shareholders using control to harm the interests of small and medium-sized shareholders.

What are the circumstances and conditions under which the 4. applies to shareholder derivative action?

Shareholder derivative litigation refers to when the interests of the company are infringed by the controlling shareholders, directors, supervisors, senior managers or third parties, and the company refuses or neglects to exercise the right of action, in order to safeguard the interests of the company, the law gives shareholders with legal qualifications the right to file a lawsuit against the infringer on behalf of the company and investigate its legal liability, which is essentially a common interest right.

The premise of shareholder derivative action is the "exhaustion of the internal relief rule". That is, shareholders who believe that the company's rights and interests have suffered losses and file a lawsuit in their own name must first prove that they have requested the board of supervisors or the board of directors to file a lawsuit in the people's court in writing, but the board of supervisors or the board of directors of the company does not sue, the shareholders have the right to file a lawsuit directly in the people's court in their own name for the benefit of the company.

In order to prevent the occurrence of abusive litigation, only shareholders of a limited company who individually or collectively hold more than 1% of the company's shares for more than 180 consecutive days are eligible to bring a shareholder derivative action. If a shareholder directly brings a lawsuit against a director, supervisor, senior manager or other person, the company shall be listed as a third party to participate in the lawsuit, and the successful interests shall belong to the company. If the shareholder's claim is partially or fully supported by the people's court, the reasonable litigation costs shall be borne by the company.