Legal basis: People's Republic of China (PRC) Company Law.
Article 149 Directors, supervisors and senior managers who violate laws, administrative regulations or the articles of association when performing their duties in the company and cause losses to the company shall be liable for compensation.
Article 151 Where the directors and senior managers are under the circumstances specified in Article 149 of this Law, shareholders of a limited company who individually or collectively hold more than 1% of the shares of the company for more than 180 consecutive days may request in writing the board of supervisors or the supervisors of a limited liability company without a board of supervisors to bring a lawsuit to the people's court. Where the supervisor is under the circumstances specified in Article 149 of this Law, the above shareholders may request the board of directors or the executive director of a limited liability company without a board of directors in writing to bring a lawsuit to the people's court. The board of supervisors, the supervisors, the board of directors and the executive director of a limited liability company without a board of supervisors refuse to bring a lawsuit after receiving the written request from the shareholders specified in the preceding paragraph, or fail to bring a lawsuit within 30 days from the date of receiving the request, or the interests of the company will be irretrievably damaged if the lawsuit is not brought immediately in case of emergency. Shareholders specified in the preceding paragraph have the right to bring a lawsuit directly to the people's court in their own name for the benefit of the company. If others infringe upon the legitimate rights and interests of the company and cause losses to the company, the shareholders specified in the first paragraph of this article may bring a lawsuit to the people's court in accordance with the provisions of the preceding two paragraphs.