In the corporate governance project undertaken by our firm, a shareholder was involved in a criminal offense, which led to the inability to conduct normal company resolutions. Later, the shareholder was sentenced and all of his personal property was confiscated, and the equity he held in the company was also subject to judicial auction.

According to Article 71 of the "Company Law of the People's Republic of China" and Article 22 of the "Provisions of the Supreme People's Court on Several Issues Concerning the Application of the Company Law of the People's Republic of China (IV)", when the people's court transfers the equity of a shareholder in accordance with the legally prescribed enforcement procedures, it shall notify the company and all shareholders, and other shareholders shall have the right of first refusal under the same conditions.

According to the provisions in the announcement of the judicial auction of equity, shareholders who are interested in purchasing the equity shall submit supporting materials and declare their right of first refusal. We assisted the client in handling relevant matters such as asset evaluation and the declaration of the right of first refusal.