This is what happened to Ang Boon Tian, ??a member of the Singapore-based Crocodile International Organization (CIO). He is the general manager of Shanghai Oriental Crocodile Clothing Co., Ltd. Now, he turns to the experience as an exercise. Singapore Crocodile (which has nothing to do with the French brand Lacoste, whose trademark is also the crocodile) violated at least two rules of survival for foreign investors trying to gain a foothold in China: first, they did not pay close attention to their own operations; second, they failed to prepare for possible conflicts with Be prepared for management conflicts in China.
In 1998, Shanghai Oriental Crocodile Clothing Co., Ltd. fired Fan Juanfen. Fan Juanfen has long been responsible for the company's business operations in China and owns a small share of the company. Over the next week, there was an uproar at the company's Shanghai office, with company documents taken away and computer hard drives missing. Soon, two-thirds of the Shanghai employees left the company. A few months later, Fan Shang registered a new company and began selling men's sweaters, shirts and jackets in a few stores. All of these stores were former Oriental Crocodile retail stores.
The story is a familiar one: A foreign investor and a Chinese partner formed a company with a multiple-shareholding structure to circumvent Chinese regulations on the activities of foreign companies. Foreign investors give Chinese managers considerable management authority and a stake in the company, but little legal protection in the event of disagreements.
In this case, the dispute continued over several years through a series of lawsuits. This partly reflects the fact that China's legal system remains unable to resolve such disputes due to political and local feuding.
A Chinese lawyer working for a foreign company in Shanghai said: "The first rule is to try to resolve these disputes before going to court. What about the second rule?" The second rule is to try to comply Rule number one.
At present, the amount of money involved in the crocodile incident is not large, but it is obvious that the matter has become more and more personal. Born in Malaysia, Ang Boon Khim is a golf fan who once lived in Los Angeles. After the incident, he felt that he was in increasing personal danger. He later hired a bodyguard to escort him to the golf course and even accompany him to a sauna. This went on for six months.
Fan Juanfen denied that she had done anything wrong. She argued that she had started the Crocodile business in China and had only been kicked out by greedy foreign partners. She pointed to the fact that many employees left the company as proof that they trusted her.
How did things get to this point? Let's go back to 1993, when Tan Hian Tsin, the founder of Crocodile International Singapore, came to China for a visit. He discovered that there were a large number of counterfeit products for sale in China that imitated his company's clothing. Through someone's introduction, he met Fan Juanfen, who was only running a small clothing trading company at the time, and authorized Fan Juanfen to sell crocodile brand clothing in China. One year later, Singapore Crocodile International invested US$800,000 to establish a wholly-owned company, Shanghai Oriental Crocodile Clothing Co., Ltd., which is responsible for importing and selling crocodile brand clothing in China. Fan Juanfen naturally serves as the general manager of the company.
However, it was stipulated at that time that foreign-funded enterprises could not open retail stores in China. With a few exceptions, foreign-funded enterprises were absolutely not allowed to operate retail businesses. As a result, Oriental Crocodile established six regional trading companies and held a small stake in each company. Among these six trading companies, the legal representative of four companies is Fan Juanfen.
At the time, the strategy worked. In Shanghai, Shanghai Oriental Crocodile Clothing Co., Ltd. and Shanghai Oriental Crocodile Trading Co., Ltd. **** use this warehouse. When retailers want goods, Oriental Crocodile Clothing Co., Ltd. will transfer the products to Oriental Crocodile Trading Co., Ltd., and the two parties will settle accounts monthly. Shanghai Oriental Crocodile Clothing Co., Ltd. started with a registered capital of US$1 million. With this strategy, the company has developed rapidly and made huge profits.
In early 1998, cracks began to appear. Singapore Crocodile International invited Hong Wenzhan to Shanghai and asked him to manage the business here. Hong Wenzhan said that this is to prepare for the listing of Singapore Crocodile International.
Hong Wenzhan has been dealing with the clothing industry for a long time, but his Chinese is not very fluent. He once had a dispute with Fan Juanfen over company accounting issues.
After Fan Juanfen was fired, Oriental Crocodile filed a series of lawsuits in Shanghai, accusing her and 18 other former employees of misappropriating company funds to buy properties for themselves. But Ms. Fan said the properties were part of their salary package. Oriental Crocodile was ruled against Oriental Crocodile in three of the series of lawsuits, but the company won the remainder, despite appeals from all defendants.
In May 1999, police in Chengdu, a city in central China, detained Fan Juanfen for 26 days on suspicion of embezzling public funds. Subsequently, the Shanghai police took Fan Juanfen back to Shanghai on the pretext that Fan Juanfen was under their jurisdiction. Last year, the Chengdu police once again tried to bring Fan Juanfen back to Chengdu for questioning, but they had a fierce argument with the Shanghai police at the Shanghai airport and ultimately returned empty-handed.
In February this year, the Supreme People's Procuratorate in Beijing revoked the arrest warrant against Fan Bingbing. The Supreme People's Procuratorate specializes in handling disputes between provincial and municipal prosecutorial offices.
Meanwhile, for much of February, Fan Changjiang was a special guest at the annual meeting in Beijing of an influential organization that provides advice to China's legislative body suggestion.